Short and to the point.

Alternative options to an account based system, and why you think they are preferable.

I think accounts allow the development of reputation and facilitate trade based on that.

I am assuming that users of this system will have accounts, and they will be able to do up to two things.
1)buy
This is easy,when a user buys something(using BTC) the amount must be deposited to the system, it will then be kept in escrow until the trade is clear. once the buyer recieves their goods/services they can select to clear the trade, releasing the funds to the seller.

If there are any problems they can dispute the trade - I will discuss this a little later.

2)sell
To be able to sell the user must be verified, this involves:
i)making a BTC deposit (for example 500BTC) that will be used as a kind of insurance and to cover dispute costs.
ii)provide a public key that can be used to authenticate future trades from the user
iii) verify the users email address, which must be the same address in the public key(any email address will do, even on in i2p)
iv)if the users public key is signed by another system user who is also a seller (and has also been verified) this will reduce the amount of the deposit they must make by 100BTC to a minimum of 100BTC(signing by multiple, current users is ok)
v)sellers may only sell 10 times the value of their deposit. If they have 100BTC for example they may sell for a value up to 1000BTC, if they wish to sell more they must deposit more. (Is this a bad idea? I'm not sure about this one, I think it provides a kind of insurance)

This allows for a users identity (their online persona, not their real identity) to be verified with cash(BTC) and a web of trust. This is required for selling because most things being sold cannot be held in escrow until the trade is complete while a buyers BTC easily can.

To put an item for sale on the market the seller must create an order(containing details specified by grondilu). This order is turned into json(or yaml)text and signed with gpg, ensuring it's authenticity. It is then pushed to the server.

The server will verify the authenticity of the signature, check to see if the minimum deposit amount is available and if so, place the sell on the active market table.

once a trade is made (this part requires more details, how is a trade made? this is not ebay or simply an online store)the buy and sell orders are made a pair, the pair is hashed, this hash is id of the trade. The trade is moved from the active trades table to the clearing table.

For the trade to be cleared the buyer must select the "good trade" button (or something like this), if after a period of time (specified by whom?) the trade is not cleared or if the "dispute trade" button is selected by either buyer or seller the trade will go into dispute.

Once a trade is made the seller must, after sending the item to the buyer , select the "sent item" button. The buyer or seller may cancel the trade at any time before the "sent item" button is selected. but there is a cost of 10% of the item cost(perhaps this could be lower, I don't know, but I think there should be a cost to canceling trades) to whomever cancels the trade. 50% of this cost will go to the other party and 50% will go to the market.

Dispute
It is in both parties interests to stay out of dispute. To resolve a dispute will make charges against the buyers and sellers deposit.

Both the buyer and seller will write what the problem is in the dispute application. the details , with the users reputation details will be placed on the dispute application.

the system judges (those who work for the system) will process this application for a fee(this fee is taken from both the sellers and buyers deposit, I don't know the amount), and the judge will make a decision and take appropriate action(such as release funds to the seller from escrow, refund the buy the full amount and take the dispute charges from the sellers deposit).

cleared trades will be added to the reputation of both buyers and sellers. once trade pairs are made both buyers and sellers will have the chance to view each others reputation before continuing or canceling the trade.

The system will take a btc commision on each successful trade, maybe 1%.

At first the interface will be web based, and then desktop clients will be made.

I hope this makes sense and I am not rambling. Please let me know what you think. Also please provide advice where I have missed details or made some mistake or a poor decision.

I think is is non-trivial to create a p2p reputation system.

A persona may participate in multiple communities. These communities may not in anyway be related to each other. Such that the reputation in one community does not usefully transfer to another community.

An example, a person who has built an excellent reputation as a good body builder in the body builder community of bbuilders.com. Their reputation would be little use on...... mises.org with regards to economics.

Personas can be reputable and responsible in one area but this does not mean it will transfer to another area.

Most communities are centralised, for online communities they are centralised around specific websites. The bitcoin community is centralised around bitcoin.org and it's forums.

It is to the advantage of the communities to develope a centralised reputation system. Ebay has one. And it does not only need to be based around reputation, you could buy reputations (with bitcoin) and losing it would cost you your btc deposit(this is poorly worded).

I assume you are specifically talking about a trading reputation system, this needs to be tied into the trading system it is used with (such as an exchage or bidding website).

I have been pondering the details of a trading related reputation system to allow trades to occur using bitcoin that will minimise loss to scams and cheating. I have not finished pondering.

It was somewhat similar for me. I also came to the conclusion that the only tchnical defence against government was through cryptography. What they (the government) do not know they cannot control or remove.

Back to the originl topic of the post it seems that those using bitcoin and cypherpunks, and Austrian economist libertarians or a mixture of both.

My comment is going off topic a little (and seems to drift also)so please be patient with me.

Shareholdings, bitcoin based companies that officially do not exist in the real world, this is an interesting idea, I wonder how it might work.

Just had a look at loom.cc, interesting idea, but new accounts require invitations. Does it cost anything to start using loom? It doesn't involve the clearing process it seems. Actually this is what is needed to ensure secure, anonymous (regarding real id's people would still use pseudonyms that have an online reputation) trade.

This is something I've been wondering about, the clearing process. Once an order has been made, how is it settled? And how can we ensure that one or both parties are not cheated? And how can we keep parties from having to learn identifying information about each other(learning each others bank accounts for cash transfer etc.).

I am trying to conceptualise how I can perform Chinese RMB exchange for bitcoin (and fascilitate others doing so) without using my bank account as the clearinghouse (I know this is not the right word but I can't think of any other). Another method is to fascilitate trade between users who will learn each others bank account numbers to perform a trade. There is cash in post, which in China is impossible(post is so unreliable for regular letters, if there is cash involved it will certainly to be stolen). And finally there is face to face meeting.

Would providing a bitcoin escrow solve this issue to an extent?

Governments (especially mine) have gone to great effort to make it difficult to perform trade remotely without being identified to the government. And where cash transfers are concerned this has worked. Money laundering legislation in the US has the same effect. If you cannot prove you earned the money to buy something legally then it can be confiscated. Your home, property etc. In China the situation is even worse as there is a lack of clear judicial process(that is unbiased).

My post probably belongs in a different thread.

So a simple site on i2p copying some from bitcoin.org and having the bitcoin client available for download would be ok?

That would be more difficult than what I was thinking of. But it would also be much much better.

I was wondering how practical it is to make bitcoin.org available on i2p. The address bitcoin.i2p is still available and it would allow users to use the site when it is eventually blocked by (insert your favorite dictatorial regime here *mine is China*).

Actually most if not all services for bitcoin should be made available on i2p for when they are eventually blocked by various governments around the world. Already a number of exchanges are available on i2p(it is even mentioned on the list of services available on i2p's most popular wiki.

It is only a matter of time as bitcoin is already illegal in a number of countries (although it has not been banned it's existence and purpose of use violates the law), it will only require it's discovery by the wrong law official for them to take notice of it.

Actually this is something that I would like to create, I will have more free time over the next few weeks so I should have something at the end of a 3 week period. It won't look nice but it will be functional, my skill is not design(would anyone like to do the style?actually it is better to have some visual mockups first, anyone want to collaborate on this?), and as I have mentioned before I am not a very fast developer.

I will begin coding on Monday(I am always busy on the weekend).

Sorry caveden, I'd like to have a look at those links but youtube is blocked and the ssh connection I had to the outside world has also been blocked. All the most useful sites on the web have been blocked and I don't have a credit card to buy a private vpn connection.

So, what does an exchange look like?

Anyone do a simple powerpoint(OpenOffice.org present) mockup?

2-5 slides?

Can you imagine going to the police today to report the theft of your wallet.dat 

Most complied because the coins are created by the Tencent company, and all coins are for redemption on tencent servers so they would be useless otherwise. I'm saying this poorly, basically the company complied with the governments request.

Violation of this law would at first be ignored, until it crosses a line(in terms of usage numbers or value or bothers the wrong person) then punishment would be severe. Most small crimes, theft, pickpocketing go unpunished here even when reported. I think no one would even know this was a crime until it reaches a certain mass or the wrong person becomes aware of it.

I'm assuming this is only on Windows?

In reply to the original question, bitcoins will have value as long as people are willing to trade goods and services for bitcoins. Currently there are some currency exchanges where you can measure bitcoins value against the dollar. So that now 1000BTC is roughly $250. But you shouldn't think only in terms of exchange rate but in terms of goods.

1000BTC now will buy you, what 9 vibrating dildos at the bitcoinsextoys.com (sorry, just found this). These are just goods, goods and services, and as long as people are accepting them then they are worth something.

As for bitcoin being banned, I think that we will have an early trial by fire as it begins to be used in China. This is a totalitarian regime, all currencies are banned except those specifically allowed (Reminbi, or peoples money, also called the Yuan). All activity here involving bitcoin it illegal; therefor bitcoin and it's markets must develope entirely in the black market.

But despite the government power here many people (especially in tourist areas) accept US$ and I think China was the first place to begin accepting digital money as a form of acceptable currency (QQCoin) until the government banned it(bear in mind that QQCoin was not created to be used as a general currency, nor was it encouraged, but it happened anyway).

I do not know how it will exactly begin here but every step it takes is illegal, and therefor must be survivable.

Actually having thought about this for a while (and the threat models in general for many many months) the answer is that no encryption or protection of wallet.dat should be provided by the bitcoin devs at all. I will provide the following reasons in the points below.

1)It will take development time away from core development items. Bitcoin.exe is very young and providing this kind of functionality is too much too soon. We have more important things that need to be done at this time.

2)There is no danger yet. One reason there are so few viruses for Macs is that they are less popular, and as a result writing a virus or trojan for them has less of an overall effect(there are other reasons, but this is one of them). Yes eventually bitcoin and wallet.dat will become a target for trojans but only after it has reached a significant level of popularity. Until it is much more generally accepted as a currency it is of no use to criminals. It will remain below criminals radar for at least 1-2 more years.

3)It will provide a false sense of security to users. Once encryption is used then trojans need only target the users password, and it is very easy for a trojan to steal a password, making all encryption useless. This is why the Pidgin IM follows this route, they believe that encrypting the users passwords (for their IM accounts) will give users a false sense of security, so they leave it un-encrypted, in a text file, and specifically tell the user this.

The actual problem is once a users system is compromised there is nothing that the bitcoin.exe can do to protect wallet.dat

The only way for users to protect themselves is to work in preventing their systems being compromised by trojans and viruses and unauthorised users. This means they must have full disk encryption, if they are using windows they must have good, up to date anti-virus and anti-spyware, keep their system and applications up to date, and be careful where they visit on the internet or what they install. For other operating systems it's a lot easier; full disk encryption and that is pretty much it.

If users want to protect their money they must take action to do so, they must take it seriously. Keep backups etc. They have locks on the doors and windows of their home, some even have alarms. If they have anything worth protecting they hide it. They same can be said for the important information on computers.

And besides, I believe a lot of the people who are here(and using bitcoin) are cypherpunks, crypto-anarchists, and Linux or Mac users, and in general wear tinfoil hats. This is one of the first places I have been where it is considered normal for users of the site to use PGP encryption. The other users are all Austrian school economists, and they will be happy to pay someone to secure their system for them.

An idea I've just had (it's in another thread also) is some of my better students can translate some of the bitcoin.it wiki for a few bitcoins. which they could then spend on Tor bridges (are there private bridges? where the IP is not in any way publically shared?) that are rented out (for BTC). A simple web based "rent tracking" application could be made. The application lets you know if the rent has been paid, also it would keep the payment in escrow to ensure the service is delivered.

It wouldn't be too difficult to implement, as no actual Tor/BTC integration is required. The renter and rentee would need to keep track of their usage(aided by the web based application) which would manage the payments through an escrow.

It's simplified.

Actually that is a great idea, I could give it as class work for my better students, and they can use it as a way to earn some BTC(what they would spend it on I cannot guess).