Bitcoin Forum

Fact: The average person doesn't want to use Bitcoin because 1) it's difficult to use, 2) your funds can easily be stolen and 3) they can't even buy them.

EasyCoin's proposed solution:

All Bitcoins will be pegged to virtual credits in a database, like current payment processors. Trades will occur between accounts while actual Bitcoins are stored in sound, robust and offline storage. Transactions can be reversed in case of fraud or otherwise by a competent arbitrator.

Due to this reversibility, people can purchase Bitcoins with their credit card due to the eliminated chargeback risk. E.G: If somebody does a chargeback on their credit card, the purchased Bitcoins can be reversed.

Bitcoins can also be recovered after theft. Again, payments can be reversed in case of account compromise.

If people want to claim the Bitcoin their credits represent, they can personally contact the EasyCoin service, verify their identity and account, then claim the sound backing that makes this all feasible. The risk of irreversible theft is completely eliminated.

The EasyCoin payment processor will also be called Easy for a reason. The interface will be familiar, convenient and exceptionally easy. No technical clients, storage nor addresses. Just a simple click and login to pay.

Finally, EasyCoin software will be open-source and available to everyone. Everybody can open a payment processor to mitigate risk in the industry. Competition will keep all competitors accountable in safety and service.

Inspiration: http://www.twitlonger.com/show/b8qli4

Wikileaks has called for a Bitcoin sub-currency and it seems like the most optimal solution.

Your thoughts?

If you're interested in building this with me, contact me: atlas.l.goATgmail.com

So what are Bitcoins for then?

Digital Gold backing. They enable sound money and possible anonymity if you use an anonymous EasyCoin service.

EasyCoin just an overlay that makes it easier to get into Bitcoin in the first place and enables the average person to pay with them.

How are you supposed to fight chargebacks if you don't know who chargebacked? It can't be anonymous.

The only way you can be anonymous is with a prepaid credit card. You can still reverse the transaction on that account. No names were ever necessary.

As long as it doesn't change into an evil fee nazi site like paypal it'll be good.

Hence why the software will be open-source. The Nazi site can compete with good ones.

I think this is a good idea -- I actually posted yesterday in another thread about how Bitcoin and merchant services and/or consumer services aren't actually mutually exclusive ... It's simply easy to peel off the extra layer for those who don't want it. :)

My roommate has a home business, and I've been considering accepting bitcoins as payment -- but if he was running his business without my help, that'd never happen because he wouldn't know what the hell to do with it. My neighbors wouldn't know how the hell to get coins of their own. And they'd be leery of spending something with no protection at all...

Fraudulent chargebacks are indeed a pain in the ass for sellers, but lack of protection is a pain in the ass for buyers. I've had to issue chargebacks a number of times against dishonest merchants. I've gone to a store, bought something, and had it turn out it was defective, already used, and sold as "new" in violation of the law, and then I go back and they point at a sign that's actually only visible in the manager's cubicle that says "NO REFUNDS" ... We have technical solutions to this, except I don't think I could ever explain GPG and chains of trust to my mother. :)

Frankly, I think this is the only hope for Bitcoin. I can't imagine normal people using it otherwise.

I agree that it's hard for Bitcoin to make it become usable for normal people.

I want to accept Bitcoins for my business but I just feel like it's pointless since people can't get them anyway.

Who goes to exchanges and deposit USD to trade for EUR? No one, they'll just go to a local exchange shop at the airport.

You really can't. It's a matter of built trust. Again, this is why I want this software to be open-source.

Because virtual accounts like MtGox's and MyBitcoin have shown to be secure ...

Yeah, I agree. My roommate has a home business, so does my mother, so do three of my cousins, and one of my aunts... One of my best friends is a small business owner. I know around 30 people who own a business with 1 to 5 employees, either relatives or personal friends. Despite all the threads about "we need more businesses to take coins!!" I have never even tried to talk any of them into it, just because ... I mean, for crying out loud, most of them use Windows and about half of them have antiviral software. That alone is a huge barrier. And then, "Oh, and for EVERY transaction, generate this long-ass random address and read it to your customer." Three of these businesses are entirely via phone or walk-in. Sure, we push bitcoin for online stuff, but ... a currency you can only use on the net is always going to have that as its limit...

Those were early examples and were bound to fail. The industry has learned.

In addition, EasyCoin will have a Bitcoin claim process with the tightest security. No real Bitcoins will leave in rogue hands.

+1

Fantastic Idea. I wish you luck in creating it. Once my coming business opens and gets rolling we'd love to support the project in anyway we can.

This is the right idea.  I'd like to get my family into bitcoin, but right now, can't trust them to secure their wallets properly, not fall for phishing, etc.  I've tried mybitcoin.com and it's decent.  They -- and other online wallets and exchanges -- would be the natural starting place for this extra layer.

I think the idea is good in general, and I think that is what the old banks will do in the future (those who don't die).

It is like gold-backed money in a bank, but the bank must be way more careful and care for their clients, because they could easily pull all their bitcoins out of the bank (which is way harder with gold).

This will also make reversable transactions possible in scenarios where people want it. Where people don't want it, they can use hard cash bitcoins.

Just use Lindens then.

This system will simply break the Bitcoin purpose in my opinion. This is not what Satoshi intended (so to speak).

I think a better way is to discuss how to get people turn USD into Bitcoins (in their personal wallets on their computer).

Great idea.

Bitcoin backed virtual currency!

This is the way. People have to wait forever to get their USD into Bitcoins without direct CC payment, which defeats the purpose of paying for things online: quick, easy and convenient payment.

The available methods to turn USD/other currency into BTC is terrible because it takes many many days, unless you keep BTC laying around in your wallet in amounts that are usable. To get a transfer from a bank account to dwolla then to a trade site, it can take 5 business days. By that time, the thing you wanted to get is probably long gone. Even a one day delay can bust some purchases.

With disputable payments you lost low transaction costs with credit card association the anonymity, and you require me to trust an operator and expect me to believe that it is backed by gold ....

... for all that I have a choice of currencies, that already have the infrastructure and need no explanation.

It's not for everyone. Heck, it's better than a dollar not backed by gold at all.

DigiCash backed by bitcoin anyone?

Come to think of it.. it's really just amazing how the price of Bitcoin got inflated and is at 15$.. It's just pure speculation, no one spensd the Bitcoins at all (ok, maybe a very few people).

It's really just waiting for the first trader to realize Bitcoins aren't worth anything at all actually, since no businesses accept them (and businesses don't accept them because there are no customers anyway). When that happens the price will probably nosedive.. It's quite important to get some substantial 'bitcoin consumer'-base before that happens.

Satoshi has built Bitcoin.. now it's upto exchanges and miners to get people to buy Bitcoins for consumption...

Yes and for that we need to reduce the barrier on usability, but not by compromising key values.

An other possible route is to offer a service not available with other currencies consider the trust chain I have thrown in here: http://forum.bitcoin.org/index.php?topic=25409.0

Normal people can't use systems like these.

Like the current client BTC, yes. You are right it is not user friendly and too remote from concepts they know.
But it will get better AND people might be willing to learn new things IF there are added features they do not get with the credit card!

Atlas is asking all the right questions. I'm not sure if this is the right answer. It seems exactly like a central bank.

$1 parity would do more for bitcoin than anything. Open the sluices and peg it at $1. As the dollar inflates over the next 5 years, track it (i.e. deflate BTC.) In the meantime all the innovations of easycoin need to be built into bitcoin directly. Anonymity shouldn't be the default option.

It has become evident at this point that currency is only half the problem, the other half is the institutions that facilitate commerce. In that, Satoshi has only solved half.

(Ok, maybe $10 :)).

As long as EasyCoin services swear not to inflate, then I see no issue. We could definitely include built-in auditing some way.

As long as it's open source I can't see how one entity will become anywhere near as powerful the central bank. And even if it wasn't open source, some one would just release an open-source version to counter the problem. The thing is, EasyCoin, as in the original creators of the open source software, will probably run the most successful and trusted implementation of EasyCoin.

Transparency in fund would probably be beneficial. Like having real time stats of total funds and other overall statistics (incoming, outgoing, on hold, tc.) to act of a sort of public auditing system. Of course it wouldn't go into individual account details to the public api.

Exactly. If trust isn't a common courtesy, make it inherent.

I think the anonimity of bitcoin together with the possibility of immediate long-distance transactions is so attractive to criminals with accountants who know how to work with bitcoins, that this class of 'consumers' will prevent the BTC from such a 'nosedive'.  ;)

I don't know what kinda people you all deal with, but anyone who finds bitcoin 'hard' to use is completely retarded and shouldn't be allowed to handle any kind of money in the first place imho...
I can only see a virtual currency backed by another virtual currency go wrong in so many ways, at some point it won't depend on bitcoin anymore but will lead it's own life as people 'trust' in it, and then we can do all kinds of fun and bad stuff with it.

Isn't this already the case with mtgox or mybitcoin for example? I don't really see the difference between a currency backed by bitcoin and a bitcoin ewallet.

You don't really need a sub-currency. Only a central wallet, aka bank account, is required which a processing authority such as MT gox or tradehill or  <insert new account company here> can initiate and collect payments against. The problem of user friendliness comes in control of the wallet. For bitcoin to go mainstream processing bitcoins has to rely on trust as much as processing credit cards or bank debits does. It's convenience vs security. The reality is that any of our credit cards or bank accounts could be drained at any moment by a variety of firms inside the processing loop but because of trust and market forces institutions are very unlikely to do such a thing and where it does happen there is accountability because such things are not done anonymously.

I don't think we're pointing out that using the bitcoind client is hard, it's implementation of bitcoin payments on websites is the hard part. Examples like having to wait for payments to be confirmed, getting the correct amount of btc, or chargeback issues that may come up in person to person trades. It's a hard currency to implement and trust in cases like these, unlike payments with credit cards, which are now easy to implement and trust.

Best of luck with the easycoin project. Hope it's as good as the talk show  ;)

While Bitcoin in an honest user implementation is a very secure, purchased digital cryptographic key pair - produced by tiresome numbercrunching making it a scarce, precious commodity subset amongst the other useless 0's and 1's of the bit domain.  Its production costs (due to variable difficulty adjustment and production effort required - proof of WORK - same as a gold coin proofs that you have done some prospecting, excavation and extraction work to obtain it) would always tend to marginally meet its trade value.  An honestly obtained Bitcoin (set of cryptographic key pairs) is not a laundered instrument - it is a scarce, precious, digital asset amongst its domain.  An honestly obtained gold coin is not a laundered instrument - although it could also be - it is a scarce, precious, physical asset amongst its domain.  Bitcoin digital goods falls under the auspices of the digital manufacturing industry, and if it is transmitted via a telecommunications network - this communication will fall under the auspices of the telecommunications industry.

However an instrument/contract be it digital, paper, verbally or any other form, representing a commodity of intrinsic cryptographic value might fall under the auspices of the financial services industry.

See blindbitcoin.com ( https://blindbitcoin.com/ ) as an example of an instrument representing Bitcoin as an underlying commodity.  The legalities of such an implementation of Bitcoin might not be considered to be honest, in the same sense as laundering Bitcoin cryptographic keys (in the same way that any other digital/physical goods asset can be laundered) will not be considered a legal honest implementation of Bitcoin.

Rewind a couple of centuries: we have gold, but it's too hard to be used by "normal people" (divisibility, safe storage), so we store the gold safely for them and write down in our books who owns how much gold. Additionally we hand out slips of paper (notes) representing certain amount of gold that can be used by people to trade much more easily than gold.

We can also start a bank and lend this new money to people so they can start businesses. (Of course we will demand interest to cover the risks)
We can even lend out more money than we have bitcoins for, because only a fraction of people will demand to have their bitcoins at any given time (why would they want them anyhow, since you cannot conveniently buy anything with them)
This also gives us a great tool we can offer to people who wish to stimulate (certain parts of) the bitcoin economy: we simply increase the money supply and lend out the fresh money by lowering interest rate and therefore pump more money into the economy. Of course they will also have to pay us back at some point.

Well, "history repeats itself".

It is clear we have currently a problem with adoption of bitcoin and it is unclear wether or not bitcoin can make it without help of sub-currencies.

I sure hope it can: bitcoin is more promising than gold, because

• it's easily divisible
• it's easily countable
• it's easily transferrable

I would really like to avoid the problems that would come with such a solution (and are actually overcome by bitcoin):

• accountability (privacy issues, taxability, need for money laundering)
• trust requirements, security issues
• possibility of fractional reserve banking

I'm not saying you shouldn't go that route, Atlas, but I'm still hoping for naked bitcoin adoption... it'll take a lot more time and effort, though (mobile clients, wallet security, shared keys,...).

I'll be patient.

This is what the GNU AFFERO GENERAL PUBLIC LICENSE (http://www.gnu.org/licenses/agpl-3.0.html) was written for.

I agree some kind of payment processing service is needed. I also share the concern that once realized, it may not be much better than PayPal. A community organization I am involved with has started using PayPal simply because of the merchant services they provide (https://merchant.paypal.com/ca/cgi-bin/?cmd=_render-content&content_ID=merchant/donations).

From my point of view, PayPal has all of the funding difficulties Bitcoin does: I actually read the card-holder agreements. I refuse to use a credit card. The terms for online banking require me to install an anti-virus: something I consider a potential security risk, and a waste of CPU time. I can't really use PayPal, even if I did agree to their PayPal User Agreement (https://cms.paypal.com/ca/cgi-bin/?cmd=_render-content&content_ID=ua/UserAgreement_full).

it could be.  there would likely need to be a concept of "in-network" and "out-of-network" transactions.

"in-network" refers to transactions between two parties using the same ewallet.  Those in-network transactions confirm instantly, are reversible, etc.

but when the spend occurs "out-of-network", those properties don't apply.

that would increase the opportunities for fraud to occur though -- as some transactions are reversible and others not. the typical consumer might not know the difference.

@Atlas: How is this different than any kind-of ewallet that offers instant transactions (which I'm sure many will in the near future) - they take a small fee and it acts as a risk premium for allowing people to pay/withdraw quickly. Instant deposit is already in the works. Why build a whole separate currency when you can just use bitcoins, but through various ewallets/ebanks/payment processors etc combined with mobile clients, better wallet apps, etc?

@molecular: I'm sure we will see fractional reserve bitcoin banking if bitcoin takes off. I don't know if it's a good idea, but there's nothing stopping it.

I see the ecosystem evolving more along the lines of having thousands of small banks, connected via a few transaction centers (clearing houses? not sure of the terminology) to facilitate transactions between the seller's bank/wallet and the buyer's bank/wallet.

In terms of the power relationship, it's loosely analogous to having thousands of miners collected via mining pools. If one of the pools goes 'bad', the individual miners can switch to another pool.

Similarly, if one of the big transaction centers goes bad,  people can stop using it and do transactions using a different one, but still store their bitcoins in their small bitcoin bank.

This for me is the beauty of Bitcoin. Because of its digital/distributed nature we can create networks of small banks that are resistant to centralization. The geek in every family can set up the family's own bank using some open source bitcoin banking software.

Yes, we need to be able to get over the security issues and have instant + reversible transactions, but we don't want to centralize this to a single ClearCoin database. We need a distributed ClearCoin system run by thousands of individual/companies.

EDIT: Re-reading OP, I see that the intention is to have anyone being able to setup a ClearCoin payment processor. The problem comes when there are thousands of such ClearCoin installations around. The is why the idea of separating the 'bank' and 'payment processing' is important

Lol. All sarcasm aside...

Are you fucking kidding me Atlas?

Your idea is to create a central database for bitcoin worth to back against?

And you have over 1,500 posts?

Do you have any idea what the "core values" of bitcoin are or are you just talking out of your ass? You do have about 10+ posts per day so maybe it is the latter.

Just because he has 1,700 posts people... doesn't mean you should listen to him. He does not speak for the majority of the community, on this issue at least, trust me on that one.

1) Define "average person"?

2) My funds cannot easily be stolen. Eventually Bitcoin banks will become more prevalent and used than they are today, but until then computer illiterate people should stay away.

3) I could buy bitcoins when I found out about them back in march, and I can still buy them today. It's actually much, much easier today than it was 3 months ago, and I expect the same in another 3 months. Just because it's not as easy as swiping your credit card to buy bitcoins... doesn't mean we are in a crunch of a crisis or suffering from some kind of problem.

The "credit industry" took hundreds/thousands of years to mature to it's current state. Give Bitcoin another few months and I bet we will have made some great strides.

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Overall this seems like a bad idea, how are we to know that the website/server is not using modded software to inflate, whats the purpose of bitcoins if we are not trading them, it would be exactly the same thing we have now.

I am not against web services, but for me to agree with it, it MUST transfer real coins in the network, not some pseudo database jumbo jumbo make believe coins.
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I completely agree on all arguments gigabytecoin.
All the latest rant and forced attempt at improving bitcoin as it is, is pointless.

Im no geek and I could easily buy btc, sell btc, and purchase goods with bitcoin a day from initially starting to use it.

I agree. Any payment processing service that offers simple, instant and reversible payments must execute a corresponding real transfer of bitcoins at some point in the process. This is why having thousands of banks is important. Transfer from one account to another should be generally across banks and performed by bitcoin exchanges.

Thanks man... you nailed it - such epic fail....

Good for you. But however non-geeky you think you are, most people out there are 1000 times more non-geeky. Atlas is trying to get over some real problems, but his proposed solution seems far too centralized to me.

"Digital Gold backing"
"sound money"

So EasyCoin reaps the upside through instant exposure, massive first-mover advantage, growing marketshare, fees & profits, and fantastic structural support from Bitcoin. And meanwhile Bitcoin will take the heat if, when, there is "sound money" monetary downside.

This sets Bitcoin up for some nasty blowback while dramatically limiting Bitcoin's upside.


EasyCoin wants the anonymous market too?


"...just an overlay..."

From the perspective of Joe6Pack and soccer mom, the overlay-IS-THE-currency (what central bankers have always known, and exploited).

This isn't getting people into Bitcoin. It's getting people into Easycoin. Bitcoin is an afterthought for them, if that.

And if at some point, having successfully captured market share (and having rendered Bitcoin a mere background 'vault' coin), EasyCoin feels UNeasy about its relationship with Bitcoin, then Easycoin can be working on developing its own blockchain.

What Bitcoin needs are better GUIs and apps. Not a competing currency.

Furthermore, this from grau...


Grau accurately depicts the matter.

And IF there is to be a 'backing' mode, I suggest it go from virtual to physical, rather than a virtual daisy-chain.



Bitcoin is not gold. And stacking a currency on top of Bitcoin does not make Bitcoin gold (though it could open up a Bitcoin legal can-of-worms against claims of being an underlying commodity).

If (as I believe) Bitcoin is the digital best-in-show, then let's keep Bitcoin front and center...and keep making it more user friendly.

And this from chodpaba...



Trust. I've had my fill, thank you.

And open source is not a panacea. With massive first-mover advantage, subsequent developments, strategic partnerships, momentum and hot investor $$ could make mincemeat out of the wannabes trying to play catch-up.

Look, let's be honest. This is a direct competitor to Bitcoin. Easycoin is a currency; it front-ends Bitcoin as a currency and therefore will be perceived as a currency and therefore will be a currency. What is a currency if not perception? And Easycoin would not be a "sub"-currency in the sense that the term is misleading. If anything, it's an "over"-currency because it sits OVER Bitcoin.

If Easycoin runs to its logical conclusion, Bitcoin will become a cul-de-sac for everyone but the underworld and digi-techies (heck, we already have them)...with Easycoin being the central bank access road. 

The window for Bitcoin to emerge into ITS OWN with the online mass market is now.

If the argument is that some private interest is going to do this anyway, then let them. But if we lose focus, and begin to write-off, outsource, the Bitcoin interface with the public to Easycoin, or anyone, then we've handed over the most valuable asset - the growing (albeit infant) perception of Bitcoin as THE online lingua franca currency.

This is exactly the moment where techies could short-change themselves on just how unbelievably valuable, and game changing, this thing really is. Surely there is enough new found $$ with Bitcoin holders & sellers in this community that bounties can be setup to race ahead with interfaces.

I say stay focused on Bitcoin, front and center.

I do believe we need a layer of services on top of Bitcoin which provide such services as security, escrow, instant payments, reversibility. To do these, bitcoins will need to be shadowed in a database somewhere. MtGox at present shadows bitcoins in its database. Wasn't this how it was hacked? Hacking the bitcoin amount in the database and spending those coins internally?

The point is, at what point do the entries in the database become the currency and not the bitcoins on the network?

Well I agree with the problems but not the solution. Bitcoins aren't easy enough for most people yet and it's difficult to buy/sell/spend bitcoins but creating a whole new layer of currency isn't really needed to solve these problems. IMO the concept of a currency backed by another currency is more confusing than a 'pure' currency like bitcoins. It's this kind of confusing abstraction that leads to our financial problems today.

I think a much better solution is to provide a set of services around bitcoins as a currency - this is already being started. I'm personally in favour of the bitcoin banking proposal outlined here (http://ploum.net/post/bitcoin-banking).

While I agree with some of the criticisms above, I think the criticism about it being "another currency" is a bit much. Even if it was, isn't that exactly what we should want at this point in the game? Competing block chains (as wall as, perhaps, non block chain cryptocurrency technologies) /before/ there is significant amounts of lock-in? You know - markets, competition, driving innovation, etc etc?

Atlas, please ignore the haters.

I support the idea of a currency backed in bitcoin, alongside bitcoins, for a number of reasons. First, they can represent different concepts. Here's an example: bitcoin = savings, easycoin = day to day payments. This allows easycoin to exhibit different properties to bitcoin, whilst still being backed by it. For example, easycoin can be provable anonymous. OR, it could chose to be anonymous, except in the case of double spend attempts, or have any other number of properties, all by picking different blinding signature schemes.
Transactions for an additional currency can also be instant (no need to wait for confirmations), and be extended to support micropayments with minimal fees (opening up new markets).

I could go on, but I wont. Instead, here is a list of various open source projects that you should be familiar with, concept wise, before starting your venture (so that you can make informed design decisions):

Projects

Open Transactions
https://github.com/FellowTraveler/Open-Transactions/

OpenCoin
http://opencoin.org/

Voucher Safe
https://www.voucher-safe.org/tiki-index.php

Loom
https://loom.cc/

TruLedger
http://truledger.com/

Concepts

Blind Signatures
http://en.wikipedia.org/wiki/Blind_signature
See also:
Lucre
http://anoncvs.aldigital.co.uk/lucre/

Triple Entry Accounting
http://iang.org/papers/triple_entry.html

Ricardian Contracts
http://iang.org/papers/ricardian_contract.html


There is more, but this represents some of the fundamentals.

Good Luck

after reading through this thread and trying to think of a way to make everyone here happy.. this is what i came up with. the way i see it, if you have a trusted service that simply holds your money and verifies for others "its still here" and Only sends out BTC, removing the value from your account at the same time it sends the BTC out, you don't have to worry at all about any type of interconnectivity, BTC is still the up front value that is traded. let the inherent security of BTC work for us.

so if your going to go out to a store or something you send bitcoins to a MiddleMan service, they store the ones you plan to use for Free and if you go to a store you can let them scan your QR code(which contains the sites url and your username) or they can manually type it in and then they request via the service the payment, the service then lets you know via cell phone(?) "olive garden 1653" has requested to deduct "4.3 BTC(80$)" from your account, you simply "OK" it and the service sends the appropriate amount of bitcoins and deducts the amount from your "on the go storage". the store is then confident they will get their funds because this trusted 3rd party says they will and the funds themselves are on the way from the 3rd party(in the form of a normal BTC transfer). the user can Not double spend them. the service itself would take some small fee and pay the transaction fee.

the store wouldn't add Any extra features at all and would simply be a trusted middle man, Anyone can be a middle man, pricing will compete for lowest and best. depending on cost and backing, it may not be Easy to be a middle man, but if you can get a few local services to trust you, enough users to trust you, and your rating goes high enough then others that are not so local will trust you, but more then likely their will be a few 'major' ones, likely a few international, a few country wide, a few state wide, and a few city wide, all accessible by the internet. only charging fees if you send the money to someone, never for simply sending it to them and having extra sent back. they would even encourage you to keep your money in /your/ wallet not theirs 'in case of a hacking' since they hold /no/ liability in cases of theft and only make money from actual sales.

in the 'vending machine' scenario, you punch in the code for what you want, type in the web address for the site and your username (or let it scan your QR code if you have one handy, which would contain the site name and your username), the eending machine then requests this money from the service, the request pops up on your phone and you "ok" the funds being deducted from your account. the BTC is sent, the trusted site replies with "funds have been sent" and the machine gives you your funyons. this does require a internet connection and a 3rd party site, as well as some kind of cell phone for the user, even a older cell phone would work with a "press 1 to accept, or 0 to reject the transfer".

i may be over simplifying, but this seems Simple, has no interconnected services we need to worry about, the only transfer of funds that happens is in BTC. the retailers simply trust the 3rd party service to send out the BTC. not any different from trusting a credit card company to send them their money, or trusting paypal to credit your account etc.

the problems of FRB are much mitigated by the public ledger and the fact that there are low costs to holding hard BTC yourself.

But please don't ignore the large number of posts offering constructive criticism, reasons why Easycoin might dilute the Bitcoin concept and alternatives like a layer of open source distributed banking services which may do away with the need for an extra layer of currency.

I wonder how resilient bitcoin will prove to be in resisting attempts to centralize and control it through various financial artifacts. I'm hoping it's a very wild and uncontrollable beast indeed.

I think some people are looking at the idea in a weird way and/or not understanding the basics.

Lets look at Dwolla (or paypal, but paypal is a bit more evil). When you transfer money there, it goes into a giant Dwolla bank account, and all you get is a number in a database representing that you have X amount of funds deposited in Dwolla. Wonder why transfers between banks and Dwolla take forever and transfer between Dwolla accounts are fast? It's because they basically change your numbers in the database. No money has actually moved. Dwolla and paypal don't make money from inflating it and loaning out non existing money, they get a bunch of fee's.

The Easycoin idea would work the same way. You deposit bitcoin in the Easycoin account, and you get a database entry for your amount. When you spend/withdrawl/deposit your funds are updated. Yes, there are ways to inflate the currency by misleading people with the amounts in the database, but Atlas' idea includes a way for the public to audit the site.

Also, personal attacks are not a good way to discuss a topic.

+1

I love the comparison between 'banks' and 'mail servers'.

"You can currently choose between gmail, hotmail, yahoo, a local provider or even open your own mail server."

Similarly you can choose to either go with an existing bitcoin bank or run your own bank.

This is a fruitful area of investigation, I feel.

Dude, wait! Being responsible for all the friggin' computers and everything that ever happens to them is troubling enough already and I'm more than glad I quit that job a long time ago. Being responsible for my families money being safely stored in some opensource wallet? No thanks!

It's a step up from everyone in my family running the bitcoin client on their virus infected windows laptops. But I take your point, I wouldn't like the responsibility either. I'm pointing to the idea that small local bitcoin banks should be easy to create within a bitcoin banking infrastructure. (I like the analogy of the mailservers I quoted in my previous post).

If witcoin.com had a way to let external sites access and use witcoins (which are bitcoins stored in a database) you would have easycoin. All we would have to do is let people buy and sell witcoins which are tied to a user account. This is a dangerous area though because you get into money transmitting laws...

The reason we did it that way was to allow micro transactions without needing to pay fees on the bitcoin network. You can withdraw them as bitcoins at any time. You cant pay .00000001 bitcoins without paying a fee but you can pay .00000001 witcoins to vote on something or donate/support other people without it touching the bitcoin network.

Databasecoins are a different animal to bitcoins. One way to prove you have all the actual coins onsite is to transfer them to a bitcoin address provided by an auditor who then transfers them back to your site. Then the site has to trust an auditor with the customers coins.

For auditing, you dont need to move all the coins, just prove you have control of the address they reside in. There are probably hundreds of ways this could be achieved. Some kind of zero-knowledge proof on the key? Anyway I remmeber reading a number of already posted schemes to handle this problem.

This part of the post is directed at nobody in partucular. Just a general comment.
One of the issues I see with a lot of these 'lets make a php website and store the bitcoin as a database field' is that it completely invades everyones privacy. Sure, I bet you all promise not to tell anyone who i sent my coins to, including the porn merchants who may also have an account on your site (that i wish to keep private), but why should I have to believe you? What happens if a court orders you to reveal the transaction history? Are you liable to comply?

This is why, a few posts ago in this thread, I linked a bunch of research into their problem already and some open source projects that are implementing it.

Nobody is going to trust your service long term, big scale, if it doesnt use some kind of chaumian blinded signature scheme for the tokens. But I suspect almost no current 'bitcoin bank' type services even know what that is.

well for starters, the site wouldn't need to know who you are, just that you have the right pass for the account and that the account has 10BTC in it. If the Govt wants to be dicks about it the site owner could run it as a TOR hidden service and the Govt wouldn't be able to locate it to do anything. nothing stopping you the user from having multiple accounts. the cool thing about this is you don't need to trust the site long term, for optimum anonymity send money to the site, once its sufficiently confirmed you can spend it but use one user account per transaction. that seems safe to me, but i may have missed something.

Its' unlikely merchants will be allowed to do this. If they are on a site that does require identification (more likely) then you need some way to pass the new databasecoin between the 'banks'. If you just use bitcoins to do this, you haven't achieved anything. If you don't, your gonna run into bigger problems (like how exactly does one bank trust another bank).

What anonymous currencies do is separate out the currency issuer from the users & merchants, and in the case of OT even from the 'banks' that hold and manage your accounts. This way, I can take the coin, issued by the 'currency issuer' and hold it myself. Or i can have it managed by my perferred 'bank'. Then I can pay the merchant, and the merchant can redeem it at the issuer, or exchange it for a new coin and spend it elsewhere. The issuer can not ever know that the coin from the merchant is the coin it gave to me earlier, so my privacy is protected, and the merchant can still authenticate me themselves according to their local jurisdiction and own privacy policy. Of course, you still then have to trust a central issuer not to run off with the vault of bitcoins. One way around this is to have a basket currency that holds currencies from multiple trusted issuers, but acts as its own single currency. By doing this you then spread your risk between as many issuers as go into the basket currency. Let's call it 'UnityCoin'. This is the approach that OT is taking. Actually FellowTraveller has said he has an idea to provably secure the bitcoins, but he hasn't yet revealed the mechanism. I can't wait to hear it.
What I’m curious to know, is if there is a way of having a distributed issuer that could never cheat, but doesn’t suffer the same problems with ‘slow’ transaction confirmations and no mincropayments like bitcoin. Remember, with these coin schemes, you can either manage the coins yourself, on your machine, and be truely anonymous, OR you can sign up to a 'bank' type service that can add services like ongoing payments, different/better security, etc. Either way, you still reap the benefit of instant confirmations.

sounds like a lot of work - I  thought this was called easyCoin :-)

Bitcoins should never be purchased with credit cards or other method of credit. Bitcoin is cash and should be purchased with cash, or we risk transferring all weak spots of a fiat money system to bitcoin system! Cash against cash, this should be the leading principle for all bitcoin exchanges.

not really, as the money/wealth we can transfer from other systems into the btc system the stronger we get and the weaker they get.

i really like the idea, and no one said we where talking about actual bitcoin protocol development here !

its just an idea like the rest, and not that far out, and not compulsory, and you dont have to have nothing to do with it if you dont like it and cant stop it if you want to.

alot of you guys hating it are so stuck up in your ass that you have no idea about common folk. people who brought you into this world and looked after you and maybe know enough to check their email and do internet banking.

these people are not retarded because of this ! you are retarded if anyone for being so judgmental, negative and elitist.

Sounds good. Like the backing of the US$ to the Fort Knox gold reserves or the 1:1 backing of the Swiss Franc to gold.
The next step isn't far. Doubling the rate easycoin-bitcoin.. then 10x, then..
...breaking the connection...

BR
GC

Hahaha! If the USD was backed with gold from Fort Knox (as if there's any gold in Fort Knox), there wouldn't be so many dollar bank notes.
What a joke: backed with gold from Fort Knox...  :D :D :D :D :D

PayPal does not require you to have a PayPal account to pay a merchant using PayPal's services: all you need is a credit card. If Easy coin really is just a payment processor, you would not need an EasyCoin account to pay somebody using Easycoin: just send them Bitcoin to the address generated for that transaction.

You can't transfer money/wealth from a credit card. Credit card is debt. Transferring money from a credit card is just transferring debt. And debt is not wealth, it is just debt!

Not a joke, just a little history. Back in 1900 the Dollar was backed with 1,504632 gr gold and the Swiss Franc until 1973

BR
GC

(stupidity here :D)

Easycoin, as I understand it, is not 'just a payment processor'. It is effectively a bank which issues its own form of tradable credits "backed" by Bitcoins.

And at what point do the "Easycoin virtual credits" become a currency of their own? I suggest, immediately (though not immediately touted as such).

And at what point do those Virtual Credits cease to require the "backing" of Bitcoins? Well, that will be a function, over time, of the strength of Easycoin's market share and the strength of its brand name.

But make no mistake, once the thing is moving, the brand that will be pushed will be Easycoin, not Bitcoin. And people's perception, belief, in Easycoin Credits will become THE ingredient.

At the juncture where Easycoin realizes it doesn't need Bitcoin, it can work on its own blockchain which will bend wholly to the needs of Easycoin Credits. Or Easycoin can even bail on any "backing" at all (history repeats). It's all about perception.

Whoever captures the interface, captures the market. And whoever captures the market, defines the currency.

People do not care about 'monetary values'. They just don't. They say they do. But what people want is 'easy' and 'now'. Easycoin knows that and Easycoin wants to give it to them. But then what? Easycoin will have the market - not Bitcoin.

And at the point when Easycoin CAN exploit the system, Easycoin WILL exploit the system. Not because Atlas, or anyone with Easycoin, is bad - but because they are normal.

We need Bitcoin interfaces. Fast.
 

Easier said than done. Good luck!

As I understand it, OP's idea is to sell insurance policies on bitcoin transfers to merchants that want to accept bitcoins from accidental customers. So far so good. It is an old business concept and it might be reasonable. What I do not understand is what insecure aspect of bitcoin transfers Atlas wants to cover?

I think he just wants to stream line, and noobify the hell out of Bitcoins, which is fine by me. If Bitcoins are simply to hard for the masses to understand, maybe Atlas can explain it to them by putting his own ass on the line with Easycoin. Either way we're winning! Good luck to you Atlas, just make sure you pay your taxes  ;).

Not worth anything? How do you figure that? Just because they are not useful for what they were intended to be (a currency) does not make them worthless. They have value for similiar reasons to fiat currencies.  They have value because people agree that they do. If people did not agree that they had a value, then they wouldn't have any. Of course fiat currencies are a little different, since they have a government behind them, telling people they have no choice but to accept them as valuable, how much value they have is still up to the market.

Agreed Serge, significantly easier; it's not on my plate.

Just an FYI for anyone interested in this, here is his investment announcement:

https://forum.bitcoin.org/index.php?topic=25771.0

If people grab an anonymous open id and use that for witcoin then fund the account with bitcoin
http://openid.anonymity.com/


How does that invade their privacy ? Sure we can give the feds the anonymous open id but it wont do any good  :D

Just on that, does anyone think that we will always be able to dodge 'know your customer', aka The Patriot Act (US)  and Anti-Money Laundering and Counter-Terrorism Financing Act 2006 (Australia)?
They can't regulate bitcoin, but they can regulate you. and your merchants. I wonder how long it will take.

Back to your question. What I think I want is the digital equivalent of the following system:
1. I have a verified account with a bitcoinbank, according to my local rules and regulations. They can help me manage my account balances, etc. Maybe they datamatch with the ATO to profile sus activity. Who knows.
2. to make payments, I always withdraw cash from the bank, then give it to the merchant. The merchant then give it to his bank, and neither bank knows that its the 'same money'. Maybe I post half my paychecque each week to wikileaks. Maybe I spend it on hookers and blow.
3. if the merchant needs to verify me because of the product type or location, we do that process separately.

The problem with most digital versions of this process, is that it's not possible to have both step 1 AND step 2. They (VISA, paypal, Commonwealth bank transfers, etc) know exactly who I gave the money too. This is what blinded tokens try to solve.

Actually there are quite a few other problems too, like how can I prove that the bitcoinbank has all my tokens, and how can I prove that they are not a malacious bank and will steal from me, authorise transactions without my signature, etc etc.

I don't know the solution to all the problems, but so far in my travels open-transactions has done the best job of addressing them (and others).

Final thoughts; I don't think there is a perfect solution, just better solutions and different tradeoffs.

Let me say it more succinctly.

I wan't you to know who I am so that, at the very least, you can help me when I forget my password.

I dont wan't you to know what I do.