Bitcoin Forum

- RealPay's client is Open Source
- Maximum number of RealPay Units is 10 Billion [Generated in the Reserve]
- Blocks rewarded with transaction fees
- A fixed fee per transaction
- Corporate reserve approval for blocks

Let's see some more details of the whole structure.


An amount of 10 Billion RPU will be generated in the reserve. This number was chosen for its lack of proximity to the maximum size of the storage type. It is large enough though to cover the needs of a huge market where RP will expand, including countries like China, India, Japan and others.

Each RPU will be worth $1.


There will be a set minimum fee of 0.1%. Users will be able to set a higher fee within the client.

Mining will be "Normal" (=CPU, GPU, FPGA) and it will also be enabled within the official client.


There will be a corporate reserve accept/reject node that will sign all blocks and return them back to the network.

When the network has gained enough power, this will be switched to a private party node system.


All RPU will be exchanged at a rate of $1/RPU. The USD$ will be the only fiat currency that RPU will be exchanged for and to.

Now let's see some key facts:

- The exchange is a legitimately incorporated business in Anguilla (it was selected as a low cost approach just for the beginning) with a very reputable business bank account at HSBC in Hong Kong. RP plans to be incorporated in 2-3 other locations such as Singapore, Europe and the US within the first 6 months of 2012 with respective banks accounts in each region allowing for low-cost deposits and withdrawals.

- The units can initially only be bought from RP but will also be traded with others as soon as the reserve has run out of RPU.

- RP guarantees to buy back RPU at the same rate it sells them (for the beginning there will be 0% fees followed by a very small fee in the future).

- Room for speculation as there is a plan for the reserves (in $) to be invested in safe AAA investments returning a small steady profit giving back dividends to RPU holders.


The exchange will feature different payment gateways in the future.

The first payment gateway to come is Paxum. There will also be the option of a Bank Wire to our bank in HK. Soon we will add SEPA transfers for Europe, ACH/Dwolla for the US and other suitable ways.


All the above form an e-commerce business platform allowing payments and money transfers to be made online and hopefully in the future, offline. It combines the advantages of both PayPal and Bitcoin. RP's goal is to provide a very steady medium of exchange for merchants, a better alternative to PP for internet users, a competitive and profitable market for miners and more.

The specific date the client will be available to everyone is TBA.

*[Statement from the Bitcoin Consultancy: The Bitcoin Consultancy was contracted by TheGlobber (Antonios Metaxiotis) to develop RealPay. We highly encourage the development of competing digital currencies based on the decentralized Bitcoin platform. In the relatively short future, we envision an evolution of digital currencies competing in a rich ecosystem. As it stands now the mission of RealPay is not to compete with Bitcoin but to eventually provide a different service more adapted to Internet Marketing. While RealPay is not a project headed by the Bitcoin Consultancy, we plan to continue to work with RealPay managing its technical development. Our hope is that RealPay demonstrates an alternative application of the Bitcoin software for private business and independent communities alike.]

LOL funniest joke this year

Bloody hell, it's 1st of April already?!?

Where is the coverage capital?

If there is not much coverage capital, which bank, business or private person is trusting in RLCXE to guarentee the worth of that coin?

At that point this rc-coin is just the opposite of bitcoin, it's a new digital fiat, but you are not a trustable new bank of america...

There are too much critical points...

it sounds like a pipe dream and smells very scammy to everyone, who can think a little bit...

LOL! Sounds like a really solid coin. Yes, we most certainly need another, new and shiny as a turd, scam coin. Last one is slowly dying. I guess it was not scammy and solid enough.

I really do hope this is a total joke.

So much for decentralization. You are going against all that BTC stands for.

LOL. Buying your fairy money for $100 each - how stupid do you think we are ?

I hope this fails utterly grandiously for the $10K you supposedly invested into it.

PayPal is MUCH better than this BS chain. As said above, you are not BoA !

I will start my own coin and demand $10 for each coin. It is called BulaCoin !

Can anyone say scammiest joke chain of 2012 ?

10 billion premined ? Miners get only TX fees ? I guess somebody needed to break RealSolid's record of centralization ???

Website?

http://www.realcoin.org

Get real...

Sounds legit.

When's the release date for the clients?

The client will be available to everyone before the end of February (Specific Date TBA soon)

The company plans to offer something similar to banking service.

What are the legalities of this in the places where the company plans to operate?

Doesn't this run afoul of AML laws in places where the company plans to have bank accounts?

Are you planning to track all users of the service, so that you can link accounts and identities?


Is there somewhere on the website where this is explained.

Why not just use proof-of-stake here? It strictly dominates proof-of-stake as a secure verification mechanism.

You are not even employing the mint coins with your GPU marketing gimmick here. This gimmick was the one redeeming feature of proof-of-work.

Why use a system which foists unnecessarily high txn fees on users so that useless damage can be done to the environment with no compensating benefit whatsoever?

If someone else used proof-of-stake and did the same thing, how could you possibly compete with them?

Our lawyer has already been working with a representative from HSBC in HK as well as international law firm specializing in AML laws and KYC procedures for the past two weeks and they are carefully planning our moves.

We haven't added anything to our website yet but we will do so before the launch as this is one of the most important matters for a completely lawful operation of our service.

Although i am aware of what proof-of-stake is, i cannot comment on this as my reply might be flawed.

On a side note, I personally believe that miners will create a competitive market and a competitive market means competitive prices. Of course, all this is good in theory so we can only wait to see how it goes.

Nice Answers. Thanks

About your first question you are spot on.

Regarding the sort of measures, we will be using a number of reputable bank accounts in several different countries as we expand to limit exposure risk for freezing of the entire reserve. We will also be keeping a majority or all of the reserve in financial institutions that are insured.

In addition, reserve investments will be limited to fairly conservative strategies such as AAA bonds.

I don't get this part. What is the point of miners if every block needs to go through a centralized authority node?

Indeed, just do with CH did and just ditch the mining part if you are just gonna be controlling every block in the end anyway.   

Sounds like you took most of my suggestions and made them a reality.  I am glad to see it, and intrigued to see if this project works out.

To all the jokers - this isn't meant to be a Bitcoin competitor, it is meant to be a Paypal competitor.  The biggest draw (if you want to compare it to Bitcoin) is that it is tied to the dollar, so merchants and users don't have to worry about value dropping minutes after doing a transaction.  1 RLC will always be worth $100 USD.  And of course, allowing (eventual) decentralized user-to-user transactions could provide for the anonymity that some people desire.

Granted, I think TheGlobber will have a lot to prove as far as legitimizing himself and his business (we've seen too many scams to fall for another one), but I think once that legitimacy is established, it could prove to be a useful service.

Users send transactions to miners, miners send blocks to corporate node. Why not just have users send transactions to corporate node? Miners are only useful when there is no central authority. Once you stick in some sort of central authority, then there's no point in having miners.

I am afraid that the issue of legal operation is going to prove to be an insurmountable issue. But let's put that aside.

Don't you think a 1% fee is unnecessarily high? Why pass this out to GPU users? What are they doing for you and your customers again? Do they have any particular function that I'm missing?

Why not a logarithmic fee? Say (1/a)*ln (1+ax) where x is the amount spent and a is a constant? Then you start off at a 100% fee for infinitesimal amounts, the fee increases with x, but the proportion goes to 0% as the amount increases. How fast you converge to 0% is determined by a.  If you want you could use (1/a)*ln(1+a(x-k)) instead. Then k could be thought of as a minimum txn size, and the fee would be 100% for txns exactly equal to k.

Ideally, the system could supplant Mt. Gox and allow for a decentralized currency exchange. However, this won't work very well if you are putting in big unnecessary fees everywhere.

As viperjbm and SgtSpike correctly stated, this is meant to be a PP competitor and therefore a business rather than a BTC competitor.

A business needs some kind of protection in order to stay alive and thus it needs to avoid people seeking to harm it. This centralization thing has been discussed many times around here but you are missing the point here:

Scenario #1: A new cryptocurrency (lets say FantasyCoin) is created from a group of people within the BTC community with the goal to get rich and they impose some kind of centralization when it comes to mining. This is definitely bad since their interest is to control miners.

Scenario #2: A new financial business (like RealCoin) is created from a group of investors that were not members of the BTC community with the goal to create a PP alternative. In this case, it is in the best interest of the business to protect its assets and therefore some kind of control has to be imposed ONLY to keep things rolling and to be able to offer a 100% safe service to the users avoiding bad miners.

As i have posted numerous times, although we believe that mining is an integral part of the system, i myself am not into mining (although i have educated myself over the past two months i still dont understand some parts of mining) and i can assure you that none of the investors is into mining as this is just not the point we are focusing on.

Therefore, we welcome the BTC community and its miners to earn tx fees in return for securing the network and helping with transactions from users.

The plan is to be fair to all miners. If you are a good helping miner then you dont have to worry about anything. This is just an extra layer of protection for the business nothing more than that and as said in the future it could be removed allowing for a completely decentralized service.

Thanks for giving the opportunity to post the following.

This is one of the things we were looking for when i first posted the thread!

The only thing left for RLC is to figure out a good Tx Fee %. The 1% was just a random number selected (of course it was selected as it is a lot lower than what the other payment gateways offer) and we are looking at discussing this part in more detail with all members of BTCtalk to figure out the best possible solution to have both happy miners and happy users.

Therefore, i invite everyone that posted above as well as reputable miners of this community to openly discuss the best formula for the transaction fees.

Feel free to post your opinion on what the fees should be or how they should be calculated.

This is the important part of the question:

Why are there miners at all? What do they do? How are you better of with them? Why are you giving them payouts? Why do you care if they are happy or not? Why do you call them miners instead of parasites?

This is a little harsh to say since miners do a specific job.

We cant expect regular users to fill in for miners.

Therefore, a solution has to be found for a fee structure that is good for both miners and users.

UPDATE #1: We have switched from a fixed 1% fee to a minimum 0.1% fee with the option for the user to set a higher fee from within the client.

Mining will also be enabled within the official client.

We will work closely with both miners and users to find the best possible fee structure for the future.

Since our previous exchange has been censored, I assume you are responding to me again.

What is this "specific job" that miners do?

Why not just maintain a few company controlled computers with central databases of txns as the "miners"?

Wouldn't this group of company-controlled miners do the job just fine?

What additional function do miners independent of the company bring to the table, if any?

Perhaps you have some idea what this central node is and you haven't explained it. But as it is now:

1. Miners provide network security in the absence of a central node.
2. You have a central node.

Therefore, you have no need for miners.

If you have the miners performing bitcoin-like hashing, they will simply be wasting electricty for nothing. Call them affiliate nodes or something else, because they are not miners.

I think the idea is that, once the centralized transaction authentication is removed (as TheGlobber stated it would be in the future), people could make person to person transactions without having to worry about the status of TheGlobber's servers.  Which would help in the event of the government trying to block the service, or a DDOS attack, etc.  A distributed network is much more difficult to attack.

What are the exact conditions that must be met for this to occur? Or is this just a vague promise that will never come to pass?

Why is this considered a crypto currency anyway? As i see it there is a central position that controls all available funds. You basically simulate slow crypto-chain like transaction propagation with so called mining... so whats the point except a totally useless waste of power? Just keep everything on your servers and manage user's balances. YOu could just skip all that pseudo-crypto-chain stuff and be happy...

Note that the system also charges fees to pay for this wasted electricity.

1. Worked well with coiled coin.

The plan is to go decentralized in the near future.

The added layer of security (e.g. the central node approving/rejecting blocks) will be soon removed to create a fully decentralized e-commerce platform.

Also, we do NOT disapprove the creation of other exchanges around RLC. We want a competitive market because it is in the best interest of all.

Lastly, as stated before, we plan to become a PayPal alternative and not a competing cryptocurrency. The reason behind this, is that there is a need for a really low cost global payment gateway without foolish restrictions, frozen accounts, difficult procedures and the Bitcoin platform serves as the perfect foundation for such a service.

On a side note, we will gear towards being 100% legal (following all AML/KYC procedures) as far as the exchange goes. Now the RLC network is a different story and soon it will be fully decentralized thus having all the benefits that a p2p platform offers.

UPDATE #2: The release date for both the client and the exchange has been scheduled for February 10.

Your websites www.realcoin.org and www.realcointalk.org have disappeared.  The names don't resolve anymore.  Does this mean you're not releasing RealCoin now?

There has been a problem with the host from yesterday. They are having a network routing problem and neither my websites nor the host's website is working normally.

We have contacted them twice and they said that they are working on it and soon will be up and running again.

Their service has been excellent so far and this is the very first problem we have encountered with them.

The release of RLC is scheduled for February 10. If there are still problems with the host, we ll probably move to another host.

And this is the same host for the exchange and block validation services or do you have several hosts for these services?

If it is the same (and only) host, what happens if this host goes down again and there's no block validation and no exchange services available when clients need them?

The servers for the exchange and the block validation are entirely different and they will be closely monitored 24/7 by the developers and admins since they will be local servers and not leased from an online host.

We cannot trust online hosts with such important matters and that's why we have our own servers.

and what sort of security on these local servers?

So we have to pay $100 for a single coin that we won't be able to spend anywhere?  Or am I missing something?

Also, the coin cannot appreciate until the 1 trillion dollar supply is exhausted, so there is no speculative reason to purchase it. If there is a ponzi here, the Realcoin operators haven't provided much incentive for anyone to participate in it. Of course, it is possible that Realcoin is a legitimate business.

The exchange has been developed by the developers of Intersango so you can expect the same level of security. As you probably already know, Intersango has never had a single incident with their website and thats the goal of RLCXE as well.

Aren't those the same people who accidentally ran code in a production system making it send just over 500BTC to another address?

Our plan is to start building multiple services around the network.

Examples of such services found in the BTC network are BitPay and SpendBitcoins as well as others.

EDIT: We are also looking at attracting BTC businesses that would like to be part of the RLC network as well and will closely work with them to create a strong network offering multiple services.

There will be speculation before the reserve has been exhausted. We are already discussing potential investments with our bank (HSBC) in HK and the first milestone level to be hit for an investment to be made is around $200,000.

This means that as soon as we reach this amount, we will make it available to our bank for investment thus slowly increasing the price of RLC.

i meant physical security, like of the central node

Excuse me but I cannot fully understand your question. Could you please explain what you mean by physical security of the central node?

whats stopping someone from forcing their way in to where you do business/keep the local server and taking everything, in a physical sense?

Part of the appeal of your system is that 1 real cent equals 1 US dollar. This keeps computation simple. Consequently, I recommend issuing dividends to realcoin holders as additional realcoin instead of changing the realcoin price. That is, just send out extra realcoin in proportion to people's existing realcoin balances. 

Also you want to establish a commitment that realcoin will never decrease in value unless the entire system collapses. Essentially you offer some risk-free nominal return to investors and then profit based on the margin between this return and the extremely low-risk return offered by your bank. I am afraid that potential profit from this is minimal given the current economic environment (low price inflation, low real interest rate). More inflation will help you.

Of course you could gamble with the money. Maybe you win big or maybe you go bust. That kind of gamble makes a lot of sense on your end if you can keep it hidden. Taking the money and running is another option. In this case, your profit is large if you can convince a lot of people to participate in your ponzi and are able to escape punishment.

Due to these concerns, complete transparency, proven investment in safe assets, and proven location of these assets in countries with strong legal enforcement will be necessary for your success.

Vital things for people to keep in the forefront of their mind, for sure.

I do like the idea of investments issuing dividends in the form of more RLC.  This gives incentive for people to hold the coins.

Come on have you actually spent any time thinking this through.


Central agency will sell unlimited coins ONLY $100 ea.
Central agency will buy any sold coins for ONLY $100 ea.

What "competitive market" could exist?
Who would be stupid enough to pay > $100 when they could simply buy a coin from you for $100.
Likewise who would be stupid enough to sell for <$100 when they could simply sell a coin back to you for $100.

What purpose would external exchanges serve?  The same purpose the redundant and useless miners serve?

So...we can't even PnD this one ?
WTF ?
Miners get TX fees only as block reward ?

First of all, i would like to state that RLC will work as a community. Therefore, ideas like the one you posted could come to life since we are looking at creating an appealing e-commerce platform.

Secondly, forgive me if i didnt really got your idea, but how could you track people and their balances especially when they take their money out of the exchange and into client and reward them with dividends? Please dont be harsh if i am missing something here. I am learning more and more about the BTC platform day by day. Your idea sounds interesting so please post some more details if possible about the way you think it could work. I ll pass the details to the others and it might get adopted as i explained above.

Thanx

Competitive in terms of fees.

As you are probably aware there are fees associated with each exchange. For an exchange it is vital to make some profit to keep the business running. In our case there are very limited avenues to making profit and it is 100% sure that in the beginning there will be a loss till there is interest in RLC.

Now any exchange can buy RLC directly from regular users and sell it back to other users with a fee included.

I'm not seeing much of a use for other exchanges either.  Unless, perhaps, a black market exchange that loopholes around laws and sells/buys RLC without asking for identification.  But beyond the illegal... why buy/sell from anyone but the central agency?

I suppose if deficiencies in the central agency's exchange, then people might want to go elsewhere to buy them.  Speed deficiencies, etc.  Like buying BTC through bit-pay instead of MtGox.  I can see that happening...

Exactly.  Since RLC is issued by central agency and backed by that agency it functions very similar to a prepaid giftcard.

But wait people buy & sell prepaid giftcards on ebay.  Well they do but only because prepaid issuers don't give refunds.

Say you had $100 Best Buy gift card and you could go to Best Buy and get $100 the only reason to sell it on ebay would be if you could get $101+ for it.  However Best Buy sells $100 gift cards for $100 so why would a buyer pay more?  Only reason a buyer would be looking on ebay would be to pay $99 or less however why would a seller take $99 when the Central Agency will pay $100?

Just thought of something though:  What about RLC to BTC?  Or BTC to RLC?  Since RLC is tied to USD and not BTC, perhaps the central authority won't be trading for anything but USD, and that is what TheGobbler meant about other exchanges picking it up - other exchanges would pick up the RLC to BTC trades.

Please explain mining further. What incentive to miners have to give this 'coin' a second thought ?
COMPENSATION ......................?????????????

Transaction fees are the compensation.  It won't bring in a huge number of miners (especially at first), but as the number of RLC transactions build, the number of RLC fees will build as well, slowly bringing in more miners.  If 100 1 RLC transactions are made in a block, then that's $100 of fees that goes to miners.  That's the same as a block reward from Bitcoin when Bitcoin was worth $2.00/BTC, and there was around 8 TH/s of miners at that point.

In that case, why would anyone mine when there are no transactions?

100 RLC = $10,000 every 10 minutes.
That's $1.4 million daily or ~ half a billion annually.

Yeah sure when (more like IF) transaction volume is ever that high fees are fine.  This is my Satoshi came up w/ the block subsidy and have it decline over time because a larger network can be self supporting.

So the question isn't when RLC gets to the billion dollar range but more when RLC is in the $500 per block range = $5 in fees.

"that level of computational power" will never be needed.  It is a centralized system just like ScamCoin.  Mining is just window dressing to obfuscate the fact that the coin only exists because of the central authority.  There is no reason all transaction processing can't be done by a single server.

How much $$$ worth of transactions does Paypal do daily?

I do agree with you that unless RLC becomes BIG, miners will be a very small part of it.  But, there is always that possibility.  And if/when it did become big, it would be nice to know that there is built-in protection against DOS attacks (or accidental downtime, maintenance downtime, etc).  The advantage of being able to transact without connecting to a central server could prove to be very important in some cases.

Transaction signing with a central server is going to have some disadvantages, and I think mining could alleviate those disadvantages if it is ever used enough.

What built in protection?  The mining doesn't replace the confirmation by central authority.  It is simply supplemental.  So if tomorrow RLC has 9TH of hashing power the central server could be DDOS and the mining would serve no purpose.


How?  The amount of mining is completely immaterial.  1 million miners, 1 miner, 0 miners.  The whole point of mining is to create a distributed consensus.  If one authority has an override then there is no purpose except to waste a lot of resources pretending the network is distributed.

Did you miss the part where he said the central signing would be removed when there were enough miners to take over?

What are you going to do with the up to 1 trillion $ that you get from selling your RLCs? Will you always keep all that money in reserves or are you going to do fractional banking just like traditional banks? If you will keep that money in reserves, you risk having it stolen, embezzled, or just having need to use it because your company is running out of money. If you don't plan to keep all of it in reserves, then you are no better than the current banking system + paypal.

In a sense, you are just printing your own currency backed by USD. Just like the US printed dollar backed by gold. And maybe one day, you will remove that backing. I hope you are prepared for the legal mess you are getting into.

No but that isn't a guarantee of anything.  Merely a vague promise with no specific conditions or enforcement if they decide not to.

Realcoin is ready for the USD collapse... Hyperinflation is coming....

I believe he said he will use smart investments to slowly grow any monies invested, which would be returned both into the company itself, and to miners.  I would hope that this means that all funds are available within X number of days, if necessary.  IMO, the funds should be invested in very safe, but very liquid investments.  I think he said the minimum balance needed was $200k for the particular investment he was looking at starting with.

No, it is not a guarantee.  I guess I don't understand your point?  Why does it matter to you whether miners play a role in it or not?  This is meant to be a Bitcoin-like Paypal alternative.  Something where people can buy and sell in USD-equivalents, without paying Paypal-level fees (advantage vs Paypal), and without worrying about their money losing value while they hold it (advantage vs BTC).  Ideally, miners would be able to eliminate the need for a central authority signing transactions, but the system still works even if that never happens.

If it's tied to USD, it'll inflate just as much as the USD will.

so no physical security then?

i would hope someone that breaks in couldn't do too much, banks at least have insurance so there is some guarantee of ze monies safety.

It is impossible for distributed transaction processing to be cheaper.  There is massive overhead in using a blockchain and proof of work.  It can never be cheaper (under any circumstances) than a simply ledger system.  A server w/ a single core celeron and couple gigs of RAM could handle all the transaction processing for Bitcoin much less RealCoin. 

Mining isn't just something which is bolted on top, it is the "cost" of acheiving consensus without a trusted third party.  So if it is not a distributed crypto-currency then be honest about it.  Drop the miner charade and call it a centralized digital currency.  Done. 

How about, call it a centralized digital USD equivalent (I wouldn't call it a currency of its own) that strives to eventually have decentralized transaction processing?  What's wrong with that?

Nothing.  Although in a perfect world some transparency on metrics for the conversion to decentralize processing would be nice.  A vaguely worded statement of "someday" doesn't inspire much confidence.    I mean if it works centralized then why decentralize it?  

Because the company would like to share the transaction fees which are generating revenue?  
So it can add the risk of 51% to its business plan?

My totally self admitted unsupported belief is no company which is profitable using a centrally processed system will decentralize it to share those profits with the masses.  If they aren't profitable then the network likely never got to the point where decentralization was possible making the whole debate academic.

I agree, metrics would be good.

I suppose we should list the potential advantages/disadvantages of decentralizing the transactions.

Advantages:
- No downtime if central node goes down - can still perform transactions.
- Government can't easily stop the transactions (though they could surely freeze funds in RLC's reserve).
- Anti-DDOS.
- Public ledger (if it was completely centralized, the company could potentially alter the ledger and no one could prove that they did so).
- Government couldn't force RLC to de-anonymize the blockchain (via IP address that transactions originated from, or other means), if it transactions were processed in a decentralized manner.

Disadvantages:
- Users could potentially double-spend via a 51% hashing attack.
- Requires paying fees to miners.

I think some very careful analysis would be needed to calculate the feasibility of a 51% attack when the company considers switching over to decentralized transacting.  A switchover cannot happen until a 51% attack is completely unfeasible, from the perspective of profitability of the attacker.

I do see what you are saying though - why pay miner's fees?  If they are successful as a centralized entity to the point where decentralization would be feasible, why decentralize?  Maybe the disadvantages aren't worth the advantages?  Given that they are targeting the Bitcoin crowd though, I think that people here feel better with public, transparent projects.  Having the blockchain public, and constantly having other miners verify it as legitimate, would help maintain credibility.  Also, the anti-government aspect is an advantage that likely would see particular favor among this crowd.

I'm speculating as much as you are though.  Just pointing things out.  I do understand your point of view, and you could be right.  But right now, I'll give the project the benefit of the doubt that they will do what they say they will do.

That's a good explanation.

Basically, RLC is not a cryptocurrency, but a corporate scrip tied to USD. In this respect, its exactly like disney dollars.

http://en.wikipedia.org/wiki/Disney_dollar (http://en.wikipedia.org/wiki/Disney_dollar)

Also issuing your own currency is not illegal

http://www.treehugger.com/culture/how-to-print-your-own-money-build-community-not-get-arrested-by-the-feds.html (http://www.treehugger.com/culture/how-to-print-your-own-money-build-community-not-get-arrested-by-the-feds.html)


Now the question about its usefulness is an entirely different issue.

I could basically replace this with an automated calculator and BTC liquidator.

i.e. I buy 2 coffees from starbucks. Price is $6.6. I ask to pay in BTC. They calculate it to BTC 1.02. I pay, they exchange it for dollars right away. The risk of slippage is small and they can mitigate it by simply charging slightly more for BTC.

And oh, a 1 trillion $ play may piss off some governments a lot more than you expect.

I'm sure the plan will be to remove the central node "in 4 - 6 weeks". :)

I think RLC has a few advantages over using straight BTC.
- You don't have to immediately exchange it for USD.  There'd be no steps beyond making sure the RLC hits your wallet.
- Prices are easy to calculate/figure out.  The customer doesn't wonder how much RLC a shirt in a store will cost - they already know, since RLC is tied to USD, and easy to convert.
- The customer doesn't have to play games with the exchange rate.  They don't have to wonder if they will save money by waiting 5 minutes to purchase the shirt.
- If RLC becomes big, I see it being used in transactions more than BTC would be, since it is stable.  I would imagine most consumers are more likely to use something for transactions when they know exactly what purchasing power it has.  I think BTC has the potential to become stable enough with high enough usage, but it isn't there yet.
- AFAIK, the only instant liquidator is bit-pay, and they charge 3% on each transaction.

Agree on your comment about the 1 trillion...

Out of curiosity, Spike, what connection with this do you have?

I gave TheGobbler a lot of tips in his original thread, and he took most of them.  I don't have any financial or other interest in the project though.  I do want it to succeed simply because it is nearly exactly what I would have done if I had the proper group of programmers/investors.  It's a smart gap to plug with Bitcoin-like technology, IMO.

But that's why I am helping defend the idea - because a lot of it was created with my input.  And because I believe it can work.

If I was doing it, there's a few things I would do differently, but the overall idea is the same, and should proof similarly (whether it works or does not).

Fair enough, was just wondering.  ;)

I figured it'd come up, given that I am responding to more inquiries than TheGobbler is... I should probably step back and let him answer more of the questions.  :p

First of all, we would like to openly thank both SgtSpike and viperjbm for their contribution in the final version of RLC. (for those who are not aware of their contribution you can check the first version of RLC to see their suggestions and ideas)

Secondly, we would like to thank both of them as well as some others for their replies and support in this thread.

Important: They have no financial interest in this project and their contribution was out of interest and with the intention to help create something different than just another Bitcoin clone. As you can see their help was priceless since RLC has the potential to become a PP alternative.

@SgtSpike: Actually you have replied to questions far better than i would have and thats why i let you and some others continue replying since you know most parts of this project and your replies are correct. So feel free to keep posting.

@DeathAndTaxes: We cannot guarantee a specific date that we will switch off central approval of blocks and let RLC run completely decentralized for one and only one reason. We dont know for sure when an attack could be non profitable for an attacker. We also believe that it is in our best interest to make RLC as decentralized as possible for the advantages posted above by SgtSpike. We would also appreciate any help from you as an experienced member of BTCtalk (and an experienced miner) to figure out the numbers behind mining and the point where we should switch off the central approval.

Now people wonder why would we want as a business to decentralize rather than keep all power in our hands. Well you can look at it this way: IMO there is a point where decentralizing could give a lot more power to RLCXE as a business rather than keeping it centralized.

Why? Because IF RLC becomes successful it will be target for a lot of people. This means that security measures around a central server would have to be huge and this means a lot of expenses.

Also think about government interference. I think they can easily attack a central server if they want to and burn everything to the ground in a matter of minutes.

Going decentralized from the beginning is not an option for obvious reasons.

Thus central approval at the beginning will help RLC avoid the early dangers and going decentralized at a later date will hopefully help RLC to stay in business for years to come if it turns out to be as good as we think it is.

Important: For some weird reason i get the feeling that some people in here have taken the part around mining and central approval a bit wrong. The central approval measure will be just a security measure against people trying to harm RLC. IF you are a miner willing to do good and power up the network then you shouldnt be worried about mining blocks because all your blocks will pass the approval. I think that you are overreacting when you hear the word "central". We are not gonna reject any blocks coming from honest nodes. We just want to have an added measure in case someone tries to harm RLC. If this happens we will be able to stop him before he does a lot of damage. As soon as it is deemed safe to switch off central approval then we will be more than happy to do so.

UPDATE: There was a bug found yesterday in the code and the developers are fixing it. We want to launch with a 100% secure and functional client and therefore we will have to postpone tomorrow's launch for a couple more days. As soon as i have news from the developers, i ll post a specific date.

Yes, but if 1RLC = 1USD, why do you even need RLC? Right now USD is as electronic as it needs to be. Why add another layer? Who would want to buy into and pay in RLC if paying in USD is already more convenient?

If preventing uncle sam from tracking your currency moves is the only benefit, I have no doubt that the US secret service will shut this down before you can say RealCoin.

This idea may be on to something but I think it needs to be fleshed out a bit. Sounds like its just a bank, they take your money and invest it and give you something akin to bearer bonds. I think this project should consider dropping the name realcoin and position itself as a bank. And get the network up and running first, and once it can guarantee security, then start accepting money. That way, you can get rid of the centralization.

Also make version 1 smaller like $1 million. 1 trillion? Come on, seriously? Also who is gonna spend $100 on a coin? Denominate it in 1$. 1$=1RLC. its easier.

The same could be said of Paypal.  Why use Paypal dollars when you can already pay with a credit card?  Well, because Paypal is faster/more convenient.  I think RLC would be even more convenient than Paypal, based on my recent purchase of a Bitcoin Magazine through bit-pay.  No logins, no hassles, I just copy/pasted the address to pay, sent the payment, and the whole thing was done in less than 20 seconds (in part, because my browser auto-filled my address information).

An added bonus for some is that the RLC could be fairly easily anonymized, even while the central agency is fulfilling all MSB regulations.

I agree with your two final points though.  I though $1B or $10B would be a reasonable cap on circulation, and that $1 should equal 1 RLC.  However, it is not up to me.  :)

Interesting. It wants to be a cheaper, simpler alternative to paypal. Ok, thats a reasonable business model. In which case, you dont really need a fixed number of coins. Let people buy as much as they want and as and when they want. Since its tied to USD, there is no incentive to invest and hoard RLC anyway.

I do like the idea of a crypto bearer bond. Lets call the issuer a cryptobank.

A cryptobank issues coins that are redeemable for cash. It invests the cash in AAA rated investments and gives interest to holders in RLC. This would be great because you dont need to keep account ledgers. You would get dividends based on the number of coins you own. This may not be different from flexcoin but a 'bank' that invests your coins may raise lots of interest (no pun intended)

I think the idea of a limited number of coins was that they could potentially increase in value down the road, if they were all issued and in circulation and none could be bought from the central entity anymore.  With a lower limit, this could potentially happen in a short period of time, but I think $1T is lofty enough that no one would hold the coins for that purpose.

I do like the idea of returning investments to holders of the coins though.  It'd be easy to do, and would give some incentive for holding/using them.

This does sound in some ways like a much larger-cap version of the approach the UKB, CDN etc folk had in mind for United Kingdom Britcoins, Canadian Digital Notes and so on. But their plans called for only issuing the same number of coins as BiTCoin will eventually end up having issued, thus maybe putting the time when its value could start to float on markets instead of being fixed to a particular type of fiat a little sooner than realcoin's one trillion coins might lead to.

The idea of using a central node to secure the mining is interesting; the UKB, CDN etc etc folk have instead gone with just using Open Transactions (https://bitcointalk.org/index.php?topic=53329.0) for now until they think it feasible to deploy their blockchains securely. The central node lets them already have the blockchain out there from the start, which might make some difference public-relations-wise, possibly. Or not.

-MarkM-

These are nuts and bolts questions about release dates. 

1.  How much notice do you you intend to give?

2.  Will there be a delay before switch on to enable users to get the software installed and running?

The above definitely seems like the winning model to me. Problem is that the outlook for this system still bleak as 1QaZ points out.
Here are some scenarios. 

1) Company is located in Moldavia. US can't bother it, but "Bank" runs off with everyone's money.
2) Company is located in Western, developed country. Can't run off with everyone's money, but quickly gets shutdown for violating AML rules.
3) Company never gets off the ground because investors anticipate outcomes (1) and (2).

Hard to be optimistic. I'd just hope that the people behind it have some fancy lawyers. Might want to make the legal stuff clear to the public to avoid outcome (3).

What AML rules are being violated?

In the US, whatever the SEC decide are being violated? :)

Bitcoin is somewhat grey area but new US AML regulations required anyone issued prepaid access (doesn't have to be dollars) resister as a "money services business".  They need to keep detailed records for 7 years on transactions, submit a money laundering prevention program to the SEC financial crimes division for approval, put in place protocols to limit daily purchase & redemption amounts, and creates an obligation on the business entity to file "suspicious activity reports" as determined by SEC.

Now you or I can say "Bitcoin or RealCoin" isn't currency it is a commodity but it doesn't really matter.  If the SEC determines that stored value is being exchanged for currency then the entire business falls under SEC "money services business" regulation which opens a whole mountain of red tape, audits, compliance costs, and legal overhead. 

If a company sets up shop and takes a "gamble" that SEC will agree they aren't a "MSB" well that opens up liability.

I agree with you, but TheGobbler said he was complying with all AML regulations (which I would assume means he is registering as a MSB, but he should clarify that for us).

That AML compliance nonsense is for the exchange. The idea seems to be that they can pretend that transfers within the blockchain exist in lala land and that the company is not responsible for reporting information on them. There is no way the justice administration in the US or EU will buy that.  They need to go to a country where you can bribe the gov't to leave you alone.

Evidence that TheGobbler has no idea what he is doing has been pretty abundant. See the thread.

OTOH, how is it any different from physically issued gift certificates or "town money" that can be redeemed for cash?  (EDIT:  Or even banks giving out cash, for that matter?)  The issuing entity has no way of tracking user-to-user transactions to report to the government in those cases either, but that sort of trading is still allowed.

It'll be interesting for sure.  I don't think it's safe to say that it will be completely free of government intervention, but I don't believe it falls under violation of any already-established rules or laws either.

To make sure that our business is 100% legitimate, together with our planned incorporation in the US we will also register as an MSB and follow all guidelines by the respective authorities.

As for transactions happening within the blockchain and outside the exchange, it is pretty much understood that they cannot be tracked and we cannot do anything about it.

I meant they cannot be tracked in terms of the KYC procedure. We know as you correctly point out the amount and the addresses involved but not the actual sender/receiver which is what the authorities want to know...

UPDATE:

Change #1: We will be changing the name to resemble a financial service rather than a cryptocoin. The new name is "RealPay" and the use of the symbol "R" will be kept at least for the beginning.

Change #2: We are keeping the number of 10 billion units but dropping the price to $1. The number has to be high because of our plans to expand in markets where PayPal is either not offered or has certain limitations like India, China, Japan and others.

Change #3: Profit from investments will be returned back to RP users in the form of dividends thus keeping the price at $1 at all times which will make things easier for users as well as merchants since you will not need to do any conversions much like with PP.

Great to hear. Since you are not a cryptocoin anymore, you dont need an upper limit on the number of coins. Advise users that you currently plan to issue 10 billion for sale and more may be offered if market conditions warrant it (so that they dont get upset)

But your business plan is a lot more clearer and simpler now. Wish you the best.

You should read up on Suspicious Activity Report requirements.   

You probably need to know at minimum name, address, and DOB for every account holder.   If people can generate anonymous accounts and transfer thousands of dollars between them, your AML plan portion of your MSB application probably isn't going to be approved.

I am rooting for you, but I don't see how you will be able to get a MSB license in the US.

Thank you for your guidance.

Actually we have a team (lawyer, consultant etc.) that is working on this so i guess they will look into it as deep as it needs to go. I am no expert in this so i am just pointing out the steps we are taking or will take in the future by regularly updating the thread with our moves.

What you mention above is definitely going to be the case within the exchange. I actually pointed our team to Mt.Gox and the AML regulations they follow. They are also looking at other similar services and taking advice from much more experienced lawyers in this area.

You will need to follow AML procedures for both the exchange and transfers of funds across individuals via the client. To do this, you will need to link all payment addresses to verified identities and addresses. If anyone attempts to buy or send money using RealPay without verifying their identity, you will have to refuse the transfer, freeze their funds, etc. If your lawyer has told you don't need to do this, they may be incompetent.

You cannot administer an anonymous USD payment system for drugs, weapons, and human trafficking. This will never be allowed, don't kid yourself. Would governments like this? If the answer is no, then why would they choose to allow it? If they don't want to allow it, how can you force them to?

It could still work however if the peer-to-peer system has lower overhead than something like paypal and thus can allow users to earn interest, pay low fees, etc. If you think this is possible, then you should pursue your project. Just give up on anonymity because it is a pipe dream.

Get Real!

Note that bitcoin marketcap as of now is about $46 million. You are hoping to be 200x bigger than bitcoin. This may happen, but I have serious doubts about it.

The second thing you have to be aware of is how the already paranoid bitcoin community will perceive this: They will basically think: "This guy is asking us to give him 10 billion dollars in exchange for a hashcode". Even if your intentions are honest and you keep everything in AAA bonds that pay 6% a year, assuming you take 1% fee thats easily 100million/year. Basically, you are trying to be a large bank (and the govt will probably view it this way, which leads to its own set of problems).

On the other hand, if you dont have a fixed number of coins (generate as people want to buy) and focus on providing a tiny fee for transactions, you may make the same kind of money, but people will focus on the 0.1BTC fee instead. The govt may also ignore you.

Want to know the biggest surprise in the Bitcoin community in 2012 ?

This will soon be announced as SolidCoin 3.0 ! :D

Even RS coin is better than this insane plan ( $10 billion, really ) !

Still no client ? Fail.

Delays after delays ? Yes.

Pairing the old banking system ( PayPal ) with cryptocoin ( Bitcoin ) theory = will not work, ever IMHO.

They stand for totally different things.

- $10 billion doesn't matter.  If that cap is never reached, it makes no difference to the operation or purpose of the project.
- Delays are inevitable when things are changed.  They've made several major changes (for the better) since starting this thread.  I'd rather see a product released later with better features due to community feedback than a project that is forgoes benefits for the sake of meeting deadlines.
- Why wouldn't pairing Bitcoin technology with the USD work?  It doesn't matter what either stands for in order to use it.

UPDATE: The client will be released some time next week (the exact date to be announced soon). It is ready and currently going through the testing phase to ensure that it is bug free.

The forum as well as the official page will be soon online as well.

Thanks to all for your support!

you know, i bet this project would have done a lot better if it was never talked about

as it is its back to looking like a joke, but hey, good luck, maybe just say less about it