Met a guy behind Open Transactons at a party this past weekend. The way he explained it, it looks like OP can do everything Ripple can, and the code is already done and opensource.
then why don't we use it? They're building the GUI for it right now ( https://bitcointalk.org/index.php?topic=225954.0). It's "usable," but is command-line only  how do you know? just taking their word for it? I find it interesting how people will implicitly trust anyone who claims to be an open source developer. There is an assumption that there are no gain motives in these scenarios thus most rule out the possibility of deception. ie. If someone is giving away something for free, why would they be lying about it? I've posted elsewhere some of the statements of the project founder, and copyright owner of OT. Let's just assume for a moment that there are no issues with the actual technology of OT(and there are), and just discuss the notion of licensing. What Chris Odom believes, is that anyone who modifies the OT code must check back in all their changes and publish them. This makes it virtually impossible to have a competitive business using OT, because all of your competitors have access to anything you might innovate. There is one party that is not subject to this rule, and that is Chris himself. this concept is described here: http://producingoss.com/en/dual-licensing.htmlan excerpt: The problem is that any volunteer who makes a code contribution is now contributing to two distinct entities: the free version of the code and the proprietary version. While the contributor will be comfortable contributing to the free version, since that's the norm in open source projects, she may feel funny about contributing to someone else's semi-proprietary revenue stream. The awkwardness is exacerbated by the fact that in dual licensing, the copyright owner really needs to gather formal, signed copyright assignments from all contributors, in order to protect itself from a disgruntled contributor later claiming a percentage of royalties from the proprietary stream. The process of collecting these assignment papers means that contributors are starkly confronted with the fact that they are doing work that makes money for someone else.[emphasis mine.] so technically, whoever contributes to this software project needs to also declare their copyright, and worse- anyone who uses it competitively must also gain permission from EVERY copyright owner(in theory, fact is these cases have rarely ever come up in court). So if anyone has contributed to this project, they also have a right to any profits gained from the licensing of this software. If what Chris claims is true, that there are MANY contributors to OT, then there also should be many Copyright owners(and this should be indicated in the software code). So here, we are talking to the 'community' and what does that mean for us? Basically this makes building on top of OT pointless(and this isnt the only reason that's true), and anything you contribute to the project is, presumably, also under the same license and license owner(although this particular aspect is not clear and falls under the poorly defined 'derivative work'). Fact is GPL is not really amenable to business ideas: http://www.linuxjournal.com/article/5935 . So if you want to do something profitable(personally I dont think you could do that with OT even if it were licensed MIT), you must rule out GPL licensed software. Another good article about why GPL use is declining: http://www.itworld.com/it-managementstrategy/233753/gpl-copyleft-use-declining-faster-everAslett is pointing to vendor use of community-based processes and governance (such as foundations) to hold projects together, rather than using the restrictive GPL licenses to be the glue the binds a project's development. AGPL. is even MORE restrictive! http://en.wikipedia.org/wiki/Affero_General_Public_LicenseBasically it closes a known loophole in the GPL, that of using the software without modification(and not requiring publication) over a network(which will be in all cases if anyone ever manages to use this software to do something). Bitmessage for instance, is MIT licensed- it's based in sound concepts, it looks like an actual open source project. So basically, this 'bounty' is an attempt by Chris Odom to get development done for free on his software platform. This is not the only suprise you get with OT but I'll save those for later.  Sorry if this doesn't read like a fun story out of Wired, but these are the nitty gritty facts of working in these areas. |
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Guys what about Voucher Safe? It' s been around since 2007 and MAYBE bypasses FinCEN because itis BTC<->GOLD.
I think it is an extremely interesting project..
It's not necessarily BTC <-> GOLD. It has digital vouchers, which is the same basic thing OpenTransactions has. Last time I looked at the project, the server was not open source. It has been around for a number of years though, and has a measure of credibility in the DC space. |
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Met a guy behind Open Transactons at a party this past weekend. The way he explained it, it looks like OP can do everything Ripple can, and the code is already done and opensource.
then why don't we use it? |
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Back to the point - a peer to peer system would need to solve the problem of double executions (rather than double spends). Perhaps a blockchain type solution would be necessary.
it's not only the issue of double executions, but also PRIORITY. Who gets to win the bids? requires a universal sense of time, OR perhaps another solution. This problem of peer-to-peer timestamping was exactly what Bitcoin emerged from. I think the solution is in a blockchain technology. |
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Greetings Bitcoin People.
There has been much talk in the threads about Bitcoin based financial instruments lately. Especially ways to hedge the future price of bitcoin. For non-Finance types, this means ways to place a bet(hedge) on the projected future price of Bitcoin. Once you have established the basic mechanism of DEBT and it's enforcement, you can then hedge against either appreciation or depreciation in an asset.
How to do it?
The first naive approach to this problem is simply create two transactions sending the BTC one way, and another returning the BTC sometime afterwards. There is one key problem with this: you can't spend the bitcoins while you borrowed them(creates a double spend). In order to profit from this scenario, you need to be able to exchange those BTC for USD, and then later buy back the BTC(at a lower price) and then return them(the basic put option). Thus you might think, why not use other BTC in your account? sounds clever, but in reality you haven't increased your leverage in this case.
What is the easiest simplest way to create a loan mechanism in Bitcoin?
-bm
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There are other interesting advantages. In the case of distributed exchanges, the chronology can determine market winners and losers. How do we decide who gets to bid on trades? What if we wanted an auction? who decides who wins the auction if it depends on TIMING? This also solves this problem for the users so long as they feel properly represented in the order of authorities. If we tried to do this with PoW, then the miners might compete to put the chain in a favorable order. In my system we make this negotiation explicit.
this order can be defined in many ways. For instance you could have one singular FIAT authority who rules all, very easy to manage, but not very easy to sell to the public. You could have a TRIUMVIRATE- or three equal authorities- which is fairly easy to coordinate and also non-biased. You could extend this principle geometrically to five or more authorities. You can also have different weight ratios for instance 1 primary authority but a school of smaller authorities that can outweigh it if unanimous(called KING AND COURT in my terminology). I still miss the point. You talk about exchanges, but at some point there must be one entity which accepts a valuable (fiat, gold, whatever) and emits a corresponding digital IOU. Which is exactly like Ripple. Basically, every money system BUT Bitcoin has this notion of IOUs. This includes the US dollar, that at one point was an IOU for gold, but now is a more complex debt instrument. This is a common response to my statements for people who are only familiar with Bitcoin and Ripple. Ripple did not invent the concept of a digital IOU. It's the things that exist apart from IOUs that are what makes Ripple what it is. How this part works is really quite mysterious, certainly not open source, the result of capital investment, and other things that make it questionable. There are claims about Ripple, and characteristics of this digital asset XRPs which to me don't appear to add up. With Confidence Chains, no carrier currency is required- and code I write will certainly be open source FROM THE START. I think that alone makes it more attractive than Ripple. I think the question of Ripple's success will be in the sheer numbers of people who simply want basic usability features(transfers, etc.) over principle and long term qualities. There is no doubt that Ripple will appeal to many users who are not involved seriously in digital currencies. It will be easy to use, provide some security of transfer and possibly exchange, but as of now doesn't offer the open source or even p2p/decentralization that bitcoin does. For instance there was a user named geekmom who was recently complaining on here about how sketchy bitcoin was(she was 'out of here'). Ripple will no doubt capture users like her, but you have to ask- is Ripple really revolutionary though? are we back to where we started? Bitcoin is unique in that there is demand for it, but there is no real world backing. Some believe this is a temporary state of affairs, others believe that Bitcoin is a new kind of currency and PoW is analogous to Gold. I leave that up to time to determine, suffices to say though that IOUs are required to preform this function of exchanging. Other platforms have also arrived this inevitable conclusion, thus it has this in common with Ripple- but to say it's 'just like Ripple' is totally inaccurate. If this doesn't work that way, how do you suggest to do it? It's totally unclear. Re. Ripple, specifically how this idea differs from whatever Ripple is at the moment is anyone's guess. They have no released their source code. At this point I dont think they can drift significantly from the core concepts, and I do know that those concepts work quite differently than what I have. Confidence Chains is very familiar to Bitcoin developers. ASMOF, you can use the transactions AS IS, in the system- which is very convenient for Bitcoin users and developers.
I know that Ripple claims to be open but it isn't, and this is bad. But what aims to do is known, and your project can't be "like Ripple, but open", because on paper Ripple itself "would" be open, while in practice Ripple isn't open, but your system doesn't exists at all, so... TRUE. At this point it's an idea- and it's not *my* system per se, it's just a proposal and if anyone has any legitimate arguments against this proposal, let's hear them. If we don't hear any, one can assume this system is valid- thus software built using the idea is also valid. Unfortunately, due to my various encounters on here I need to re-establish these basic laws of collaboration and engineering because some projects on here did not go through this process. Im not an amateur developer and I do things right. Ripple might deliver something attractive to the community, I'm sure they will deliver something. They are in business after all. The question is as to WHAT they are delivering. Ripple might have been able to hire every expert in the field, but keep in mind- those experts cost money. So no matter how much resources they have to spend on brainpower- they will inevitably come up with something designed to offer them a return on that investment. Bitcoin emerged in a much different way, from the world of open source. There have been *many* commercially produced digital currencies before and they all failed. So Ripple isn't Bitcoin 2.0, it's a commercial software no matter what kind of licensing they offer. Do you believe the investors behind OpenCoin are doing charity? If the software itself is free, then the system would be designed in order to get a return on these XRP credits. But a PR budget goes a long way, especially in the scenario where there is a lot of uneducated interest in a field of activity- which is what is going on with Bitcoin today. |
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this doesn't have 'gateways', that's Ripple you're talking about. It's not easy to shut down the authorities. They can be run from a cell phone or any other kind of unreliable connection(even email is possible). It doesn't require that anyone run a server, so you could authorize transactions from anywhere, even a mobile device. Secondly you must shut down ALL the authorities- and there could be hundreds all in different countries with different connections. It's quite resilient.
The fact is if you want some kind of asset with backing, there must be some kind of authority somewhere, because ultimately you need to be able to redeem those assets somehow. This system offers the MOST flexibility for designing that authority.
Then it looks like I didn't understand your paper. What is the difference between a ripple gateway (such as bitstamp) and your "authority"? This post seems to imply that one asset might have multiple authorities... which would be cool, but how would be that possible in practice? i.e. every single authority should be able to redeem your "coins" with the backed valuables... First off, anyone can implement this concept. Im not attempting to profit from this, at least directly. I am interested in building p2p financial products. I would like to USE this technology and I am looking for others who want to use this, then we can build a community of people who want this functionality. I think that ANYONE should be able to build and market financial products and liquidity should be available to ANYONE. Don't you agree?  The authorities are simply some kind of entity who has identified themselves in some way. It could simply be through the use of a key pair. It could be some bank sanctioned by the government of Costa Rica who advertises on their website that they are an authority in this chain. It could be the NY branch of the Federal Reserve. These authorities, once defined, have the ability to approve the block chain. The algorithm allows for something interesting- a kind of VOTING mechanism on what goes into the chain. Now if you are familiar with Bitcoin, this applies to the problems of, eg. double spends. If one authority thinks a transaction is valid, but the others dont and they overpower that authorities WEIGHT, then it doesnt get put into the chain. This, in of itself, is quite useful because we've factored out Proof Of Work, thus we have no latency- while maintaining the integrity aspect of Bitcoin. The only drawback is you must define these authorities in the first place. There are other interesting advantages. In the case of distributed exchanges, the chronology can determine market winners and losers. How do we decide who gets to bid on trades? What if we wanted an auction? who decides who wins the auction if it depends on TIMING? This also solves this problem for the users so long as they feel properly represented in the order of authorities. If we tried to do this with PoW, then the miners might compete to put the chain in a favorable order. In my system we make this negotiation explicit. this order can be defined in many ways. For instance you could have one singular FIAT authority who rules all, very easy to manage, but not very easy to sell to the public. You could have a TRIUMVIRATE- or three equal authorities- which is fairly easy to coordinate and also non-biased. You could extend this principle geometrically to five or more authorities. You can also have different weight ratios for instance 1 primary authority but a school of smaller authorities that can outweigh it if unanimous(called KING AND COURT in my terminology). Re. Ripple, specifically how this idea differs from whatever Ripple is at the moment is anyone's guess. They have no released their source code. At this point I dont think they can drift significantly from the core concepts, and I do know that those concepts work quite differently than what I have. Confidence Chains is very familiar to Bitcoin developers. ASMOF, you can use the transactions AS IS, in the system- which is very convenient for Bitcoin users and developers. |
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I might point out also that if someone were to give us something very much like Ripple, that did the same things as Ripple, but licensed it as BSD/Apache, then it would be preferable to Ripple. An interesting site about Ripple: http://ripplescam.orgSeems we have a number of 'Top Secret Open Source Projects' in this space at moment. Im really surprised how easy people buy this stuff. There are currently TWO groups with open source(or claims to such) who have founded companies around the project BEFORE they have any users. The whole space is really quite distorted, so we can expect distorted outcomes. |
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Fascinating!
I suspect you could 'mint' some kind of paper money backed by Bitcoins using Visual Crypto. Haven't really worked out the details. The primary problem is the situation where someone could COPY one of the VC factors, so you couldn't easily distribute. At the least you would need to feature a hologram/kinegram in order to prevent counterfeit. There could be a serial number on the bill, and you could check online to see if the bill is still valid(similar to Chaum), but what is the point if it relies on an internet connection? I would think you could make small denomination bills safely. There is a company that does this though: http://www.bitbills.com/-bm |
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I've read it, and it looks exactly like Ripple. Which basically trades IOUs. And yes you can close down gateways exactly like you can close down exchanges, so you would have solved nothing. I don't see how this is like Ripple. Ripple relies on a system of mutual credit, not to mention the very nature of the project is questionable. this doesn't have 'gateways', that's Ripple you're talking about. It's not easy to shut down the authorities. They can be run from a cell phone or any other kind of unreliable connection(even email is possible). It doesn't require that anyone run a server, so you could authorize transactions from anywhere, even a mobile device. Secondly you must shut down ALL the authorities- and there could be hundreds all in different countries with different connections. It's quite resilient. The fact is if you want some kind of asset with backing, there must be some kind of authority somewhere, because ultimately you need to be able to redeem those assets somehow. This system offers the MOST flexibility for designing that authority. |
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if you take the idealism out of Bitcoin, what is the point?
It would still be very useful, and that's one of the main reasons why it's so successful in the first place. Useful for what? if it behaves like a regular currency, then it has no unique qualities, and thus it's useless. |
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Given the current 'state of the union' in this case I think probably what would happen is that BTC users and owners would collectively decide on some organization to manage the block chain by, yes, FIAT. This certainly would be more attractive than the alternatives. Also someone who sought to monopolize mining wouldn't necessarily announce to the world that they've done it. They would just start selling 'mining shares' and the like. Then they are in a unique position. They could for instance, rather than just shutting down BTC, could create disruptions and profit from them. Short BTC(or sell), Create a bad block or a double spend, watch price plummet, PROFIT. Keep doing this until the public no longer plays along. All the while taking in the traditional gains associated with mining, etc. More than likely people will exploit the enthusiasm of BTC for all it's worth. Were in a phase right now of public enthusiasm, and there are plenty of people(even on this board) exploiting that to the hilt. -bm Just a quick reminder that even though we are 10 times faster than the 500 fastest super computers on earth (in doing what we are doing), we are far from out of reach to a dedicated attacker.
If I had the job to destroy bitcoin, I would borrow $20 million to build my own little asic mining op. $20 million is about what people claim BFL raised, right? Ok, make it 40 million then, but as I said, the money will come back. I only need it temporarily.
Lets assume you can mine almost at a profit, which is the case. Ok, lets do that. Lets increase our hashing power to 51% for $40 million. This is possible as there hasn't been more money invested in current ASICs. If we haven't been profitable before, now we are profitable because we can drive all the competition out of the market. All block rewards are ours. We don't interfere with any transaction as by that we would discriminate our blocks and the devs could counter our attack. We just mine all the bitcoins and behave but let the world know that nobody will mine except for us. We sell the mined coins to pay back our debt and divert hashing power that's being freed to other block chains that surely will come up. Now we can set the rules and have inflation at will.
Am I off by some millions? Am I missing some basic protection against such an attack? Are there really more miners that would try to overpower this attacker than there are miners that would just leave once it turned out this thing was ongoing? I doubt it.
I'm afraid this can only be countered by some proof of stake. Too sad PPCoin is not an option. I kind of hope that such an attack would drive the original bitcoin to proof of stake.
<tinfoilhat>Maybe we already operate at the mercy of IMF, FED, world bank, etc., we already have full approval and bitcoin is meant to replace the dollar. Not being destroyed long ago is a very bullish sign. What would be the sense in destroying Bitcoin rather later than sooner, now that VCs are entering the field? All investors are going to be pissed about whoever destroys bitcoin, so why have more enemies than necessary?
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Hi bluemeanie1, This is a neat idea, and something I'll consider if BIP38 doesn't come to full fruition for some reason. (As I understand it, visual encryption would effectively do the same thing as https://en.bitcoin.it/wiki/BIP_0038 ) As for the wallet sent to Niko not being secure because I knew the private key, it was even less secure than that because I subsequently inclued the private key in a mockup on an unrelated forum post by accident, and some clever person stole the funds while the wallet was still in transit. But to answer your concern directly -- the purpose of this wallet isn't to simulate physical cash, it's meant for (1) storing your own coins, or (2) giving coins to people who implicitly trust you, e.g. friends, family. For a full overview / explanation of the intent (and to try out the working code) please check out https://bitcoinpaperwallet.com- Canton Hi Canton, it's possible right now to make password protected coins using Transaction Scripts. Thus you could make such 2-factor protected coins, but not necessarily an entire address, but there are probably ways to simulate the functionality you are looking for. -bm |
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It's possible to make a truly secure paper bitcoin wallet using Visual Cryptography. http://www-ti.informatik.uni-tuebingen.de/~borchert/Troja/studdiplchrist/indexEN.php so what you would do is put the private key(or the secret message) into the VC system, giving you two VC factors V 1 and V 2. obviously if these two factors, V 1 and V 2, are brought together- a secret message is revealed. a serial number is generated. V 2 is labelled with the SHA hash of this serial number. V 1 is simply labelled with the serial number. V 2 is given to some local official for safekeeping. V 1, is given to the user- that is his paper wallet. He doesnt know what the private key is, he must meet with the local official and get the other factor to reveal the key(by hashing the serial number on his note), at that moment, the funds can be released on Bitcoin, and the wallet destroyed. The only party CAPABLE of knowing the secrets are the creators of the two VC factors, and even this could be automated so that they have minimal ability to know. an online tool for printing Visual Cryptography: http://leemon.com/crypto/VisualCrypto.html |
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It's on! Indeed! Your victim wallet just went out to the mailbox. If anyone reading this wants to sweeten the pot for Niko, feel free to chip a few pennies into the wallet @ 1LMKzdqhQ4LhHy5GGhT8BcG3HHpBTqAqbt. Niko, I have total faith in our respective country's postage services so the wallet has already been funded: https://blockchain.info/address/1LMKzdqhQ4LhHy5GGhT8BcG3HHpBTqAqbt how is this secure? you have the private key to his account! |
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I had lots of fun this weekend working on my own design for a two-sided tri-fold tamper-resistant paper Bitcoin wallet. Thanks for any and ALL criticism / comments -- whether it's about the look & feel, functionality, security features, etc. See: http://youtu.be/V4H1VE3EAtIThis video is also a treasure hunt in which I happily invite you to “steal” 0.1 BTC . Finders keepers, so race on! Design features: - Private key is hidden behind folds, so your wallet content is still safe if left out in the open or photographed.
- Tamper-proof tape indicates when you (or someone else!) has revealed the private key.
- Folding design obfuscates private keys so they’re hidden even when holding wallet up to a bright light.
- Reverse side has basic wallet operation instructions and a register for writing down deposits / balance.
- Private and public keys are replicated (and rotated) in triplicate to maximize chances of recovering keys if paper is damaged / crumpled.
When I’ve got enough feedback and a final design, I’ll publish a web page that will generate these wallets with just a couple of clicks. (No photoshop required, as the foundation will be based on the excellent wallet generator at bitaddress.org which as you probably already know uses a secure javascript page you can run even while offline.) If you'd like to print out a sample for yourself, see PDF links here: http://cantonbecker.com/projects/2013/bitcoin-paper-wallet-design-video/. are these things meant to be exchangeable? |
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The design of the system will be such that to transfer fiat, e.g. USD for BTC you will need to do the following steps:
1. Download and install the wallet-client.
2. Find a bid/ask that matches yours.
how do you determine who has 'first dibs' on a bid/ask? |
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