This is a good idea from a marketing perspective, the next part is to convince MTGox that their software and processes sux, and the only thing that they got right was the brand!

Maybe, rather than franchising, we should be looking at licensing the brand to the decentralised exchange and broker idea.

What we would end up with is an MTGox in every town, that works, and still pays MTGox for the investment they made in bitcoin from the beginning.

That is still a win win for me - and by using the licensing idea, it puts an element of commercial control on the brokers to use best practice - as soon as someone works out what they are!

Just saw that out of all the states in the US, Oregon is #1 in search volume for Bitcoin right now.  Any good reason for that?

http://www.google.com/trends/explore#q=bitcoin&geo=US&cmpt=geo

I bought my first bitcoins ever a few weeks ago right before they started that insane climb. I had plents of time to cash out at 600% of the value I bought them for, but I always looked at it as an asset that I would like to keep for the future. When they started to drop again after the bear trap I ended up selling enough of them to get back my initial fiat investment. A third of my coins was enough to cover the initial investment. I still feel like that was an unnecessary pussy move.

If I would have cashed out, that would make me roughly what I earn in one and a half month of work. Quite frankly, that doesn't change my lifestyle that much, if anything. Owning bitcoins, on the other hand, feels a lot cooler and now that the bump is left behind I actually feel glad that the speculators went and do their thing somewhere else.

The markets are an easy and arguably fair way to buy bitcoins, but bitcoin economy became too market centered. More usage as a currency and less market speculation is what bitcoin needs, 1btc=1btc. If growth is slow but steady there is not so much room for day traders.

Am I the only one that feels like this bubble pop (whatever it was) was a good thing?

Exactly, and until the market becomes rational, it is a terrible thing regardless of what the total market value of bitcoin is in United States Dollars

just an FYI .. we crossed back over a billion .. which is good news I believe..  a big fu to Jim Cramer.

I didn't like his report today...  just bugged me about it,  considering he got paid last year for a TV show regarding bitcoins (the good wife)...   so he can profit (indirectly from them) yet sort of slams them in the process...

I have to disagree on this one.  I think the free market will decide this one for us, and the last 48 hours or so have opened many people's eyes to the need of robust exchanges with systems built to handle the volume of today and able to quickly scale to handle the volumes in the future, if and when necessary.

When I think of franchising, I think of a successful corporate entity that has built a name, formula or business model, and systems or processes that support that existing name & model that they have proven works and they are willing to share that formula with other people, for an initial buy-in fee and recurring gross profit payments for using that already-establish system.  The last 48 hours have seriously brought at least the level of the Mt Gox systems into serious question.  I'm not sure replicating that is anything I would support and I'm not sure why anyone else would want to.

I think this will open the doors wide open for other exchanges to establish themselves as ready to handle future BTC interest in growth.  For the health of the community, I hope it is multiple exchanges run by multiple companies.

It might be nice with changing the name to something OTHER than the "Magic the Gathering Online eXchange".  That one is still cringe-worthy to me.

About a month ago i predicted that Mt.Gox would be a threat to the whole bitcoin community. They being the reason for the crash is debatable but they certainly didn't help. My problem is not that my BTC now are worth less but that it had to happen while the whole world was watching. Mt.Gox really showed people that the bitcoin economy is unstable and primitive. I think it's very strange that so many people that want to get out of the central bank's control help make a very similar system when having free hands. Does the expression "to big to fail" ring any bells?

Now with so many new members jumping in and Mt.Gox not being able to upgrade itself i knew that it was unsustainable and that the lag will get worse for everyday. Now the only thing i could think of for Mt.Gox to function properly was either:
1. People leave for other exchanges.
2. Mt.Gox stops accepting new members for a while.
When thinking about it both these options are impossible. The problem with the first one is that people are used to Mt.Gox and only a handful are leaving. And even if all the people from these forums left Mt.Gox, almost all the newbies still flock to Mt.Gox. The name Mt.Gox is to large.
The second option would be the most responsible by Mt.Gox. But why would they do it? The world is driven by profit and and why would they give their market share to competition?

Now my idea is why not decentralize Mt.Gox by franchising?
I'm thinking something like Mt.Gox let's people apply for being an Mt.Gox exchange. Mt.Gox verifies them, writes a contract and helps with consulting. They can close for new members on Mt.Gox and only accept minimum deposits of 10,000$. The rest they send to the franchisers. For that Mt.Gox gets a percentage of the earnings. This means that they get to keep their huge market share while not being a central point of risk to the bitcoin economy. It's a win-win for everybody. It could even boost bitcoin economy since more people would open exchanges and make money. This way even if one Mt.Gox exchange gets DDosed people can go trade on another. It doesn't have to be implemented exactly this way but i can only see positive effects if Mt.Gox chooses to go in this direction.

What do you think? Feel free to discuss.

There is NO WAY to do this without an escrow that doesn't require a level of trust that is, frankly, insane.

Now, said escrow doesn't necessarily have to be a "full" broker, but the privacy concerns alone would make me prefer a broker.

The M-of-N multisig contracts is a very interesting concept and can help minimize the trust needed between the seller and the broker / escrow.

An Open Ledger (whether just distributed or P2P) would solve the "what's BTC worth" issue and perhaps make it easier to switch brokers / exchanges in case of a problem with one.

However, none of that changes the fundamental problem: Dealing with fiat is a legal mess and there's just no way around it. Brokers will be needed for any kind of limited-trust transaction that won't take forever and minimizes privacy leakage.

When mtgox went black, there were plenty of other exchanges still operating. However, traders had all their bitcoins and fiat stuck there. Getting approved and funds transferred to a different exchange would take time (and require the availability of money in addition to that stuck with mtgox). Any sellers would, of course, also require access to more bitcoins in order to sell.

It seems fine the way it is, the market just needs more liquidity so that people will use it as a currency, and not be tempted to hoard it as a commodity.

Basically what you're suggesting is the opposite of what Bitcoin stands for. Hopefully this market correction leads to a nice stable price at $15-20 for months on end, then we might start to see some more adoption.

Whenever you buy a devcoin, you are contributing to projects that are open source like bitcoin, litecoin, and also other projects like games, free software, open source development of apps for your devices etc.

Don't believe the FUD on the web, I never said there will be billions of ppcoin. ppcoin inflation will stay below litecoin for maybe at least next 10+ years. It's designed to simulate gold, so don't let the fact that it doesn't use a hard cap confuse you. It's basically comparable to bitcoin's inflation.

For those of you who have to have simple numbers, just regard it that ppcoin's money supply would track closely to litecoin.

Devcoin started out with the decimal place moved over with a high coin generation rate. Its purpose is to support development so in some ways its more like a donation system than a currency but it does get used to purchase real world goods. Its still quite early in development but it's supported many projects already.

There are a few points to note

• ppcoin inflation rate is currently close to or lower than litecoin
• inflation is regulated by Moore's Law and will approach very low level in the future regardless of adoption
• short term coin production fluctuates a lot. last week there were quite a number of coins produced due to heavy mining. this week not so much.
• forget about the 2 billion figure, it's only used for consistency checking, has nothing to do with future money supply.

I'm wondering why is dev coin valued so little?

BBQ coin is already being traded for 1000 coins per btc,and it was considered a dead coin for quite a while.

Just throwing this out there:
Take an idea similar to bitmessage, where everyone generates their own address ID. Everyone also stores their own coins, and their own USD.
The order book is shared to everyone running this client, and can be modified by anyone to add and remove only their own transaction requests, signed by their own ID. Some proof of work could me included so it takes a second or more to place your order so mitigate spamming by tons of transactions
Anyone is free to put up an order, either sell or buy, with their own conditions, such as method of payment (Dwolla/PayPal/Wire), fees for cash transfer, etc. The order book organizes these so that the fee is included in the price being traded (e.g. all PayPal trades could be 10% above wire trades, etc).
Once a match is found, the transaction is locked and is accessible only to the people executing it. It is then up to the two people to get in touch (possibly using bitmessage type system build right into this) and actually carry out the trade off the system, e.g. sending btc to someone after they send cash, etc.
Once the trade is executed successfully, both parties must mark the transaction as successful, which increases the reputation record of the address IDs. This can be done by both addresses signing that the transaction completed successfully, and will be in both parties' interest to store a copy of. Since both have to sign, those can't be faked. Tying this to the OTC WOT (bitcoin-otc web of trust) would help, too. Someone could try to game the system by trading with themselves, but the risk is that their offer will be picked up by someone else, which means they'll have to carry out the trade, or get a bad rating.
Eventually, certain high reputation level nodes will emerge to be able to handle transactions for those more skiddish, possibly at a higher fee.

Concerns: still may be possible to game the system, will likely be easily succeptible to scams and chargebacks (at least until trusted nodes emerge), will not be able to handle high frequency trades, may be difficult to fill a large order that spans many smaller ones (instant buy on MtGox), and finally may be extremely inconvenient to have to ask for cash from someone directly, v.s. just having a cold anonymous system do it for you.

Of course this could also be expanded to easily include trades of MtGox codes for BtC, too, in which case, like was mentioned, big trusted companies could be the money in-out places.


It seems we have a lot of bases we can start with for the code already, be it Ripple, P2Pool, or Bitmessage...

So I've been thinking about this for a couple of days now.

I can envisage a peer-to peer exchange, where bitcoin is traded for 'promissory debts' denominated in fiat. For example, I might buy 1BTC from you, I then give you an IOU for $100. This is recorded by the network. From what I understand, this is very similar to Ripple.

Given this, a trader knows whom he owes money to and is owed money from at any given time. And of course, which debts cancel out. With this information, the trader can choose to settle his debts by making a fiat payment directly to the counterparty. The counterparty marks the payment as received on the network, and the debt is settled.

The challenging part is trust. The system could place a hard 'credit limit' on traders based on how trustworthy they are, and disallow any new trades which would go over this limit. But there's a chicken and egg problem here: the network can't give any credit to brand new users, as this could be gamed easily. Credit has to be earned. So how does one earn it, when they can't transact on the system?

Keen to hear people's thoughts on this.

Guys before we shoot this down, let's continue with this train of thought.

So it has been established:

1. We will always need commercial companies to do the exchange between real world currency and BTC.

2. The "centralization" problem lies around the fact that one IP address of a big exchange (with of course load balanced server behind it) can be attacked. It is more of a web problem than what it is a "brick and morar" problem.

Here's my suggestion

1. We have a program exactly like bitcoin. It connects to 6 peers by default.

2. Instead of sending BTC, it sends out a BUY or SELL orders to the network. In other words, the program will maintain a global p2p orderbook. The price of BTC will always be exactly the same worldwide.

3. The problem also maintains a list of exchanges. Think of what Verisign  is to IE/Firefox/Chrome. Inside any browser they maintain a list of "trusted ssl providers". The same thing applies here. Since this is open source, the community can decide which exchanges are trusted and there can be a formal application process.

So your P2P Market App will show you a interface similar to this


So if you select CanadaExchange (just an example) that will be sent to the entire network. Canada Exchange will then pick that up and do their 6 confirmations (the exact same way we receive bitcoins) and will then check their bank account for your reference.

References:
=========

You could have a "preferences" menu item in the app. From there you configure your exchanges. For example

Configure Exchange:



Additional details will be sent with every outgoing buy order. MTGox will be able to pick up your reference number for you buy order from your transaction.

That's just a quick rough idea of implementation. Of course there are holes in the idea. The bottom line is, something like this is possible, we just have to figure out the details.

The most important aspect of this whole thing is - One Global Peer 2 Peer Order book that cannot be attacked - lets work out the details around that.

Unless you want to send gold to 200 different people, likely it would match you to a gold dealer who could handle your order size.

You would then enter a multi-sig bitcoin transaction with the dealer.  And/or use escrow.

You send him your gold.  Once the gold arrives escrow releases the coins to you.  If the gold gets lost in the mail, well, insurance would handle that (just like online old dealers do it now).

The small-time brokers would keep the market honest.  They would set the market price for the large gold dealers.  Large gold dealers would arbitrage the price difference users are will to pay to fulfill large orders.  Large capacity would carry a premium in the open market.  So would reputation.

What is the meaning and purpose of "security"? How does it relate the the relationships we have? I argue that the formalizations of our relationships -- especially contracts -- provide the blueprint for ideal security.

Many kinds of contractual clauses (such as collateral, bonding, delineation of property rights, etc.) can be embedded in the hardware and software we deal with, in such a way as to make breach of contract expensive (if desired, sometimes prohibitively so) for the breacher. A canonical real-life example, which we might consider to be the primitive ancestor of smart contracts, is the humble vending machine. Within a limited amount of potential loss (the amount in the till should be less than the cost of breaching the mechanism), the machine takes in coins, and via a simple mechanism, which makes a freshman computer science problem in design with finite automata, dispense change and product according to the displayed price. The vending machine is a contract with bearer: anybody with coins can participate in an exchange with the vendor. The lockbox and other security mechanisms protect the stored coins and contents from attackers, sufficiently to allow profitable deployment of vending machines in a wide variety of areas.

Smart contracts go beyond the vending machine in proposing to embed contracts in all sorts of property that is valuable and controlled by digital means. Smart contracts reference that property in a dynamic, often proactively enforced form, and provide much better observation and verification where proactive measures must fall short.

http://szabo.best.vwh.net/smart_contracts_idea.html

Bitcoin is the virtual Lichtenstein: The primary contribution to the economy comes from the financial sector. We can not build a "country" financed on speculation alone. No more than 30% of trade value in an economy, should come from exchanges, ideally around 5%.

Bitcoin is not faulty neither are the exchanges, it's the mentality from debt based currencies being carried over to a pristine system.

There is no reason that a large order cannot be batches to hundreds of different offers in the system.  And there is no reason mtgox cannot exist on the system too, if you prefer to deal only with them.

The competition from the other brokers on the system will keep them honest and prevent another monopoly.

Having another crypto intermediary coin doesnt really solve anything.  Fiat still has to be used to buy that intermediary coin, and hence an exchange for it.  Nothing solved.

There will also evolve intermediaries in the system.  Those who batch arbitrage small orders at a discount into big orders for larger investors.

Create the decentralized platform and the market will fill in the gaps.