It's the "setting a password for a PIN" problem that's the crucial roadblock because it's the core mechanism that ensures either parties can't cheat the other.

Yes, past tense unfortunately my idea didn't work out because I ran into one big and crucial obstacle. Because my idea is now useless to me since I can't think of how to overcome this obstacle I figure the best thing to do is to share it any give someone else the chance to succeed.

So here it is:

I was planing on running an ESCROW website for trading paysafecards on one side and BTC on the other. My site would allow people to make an offer with paysafecards under an ID and lock that offer with their own password, my site would then check the PIN of the paysafecard if the offered balance is actually there and would also use paysafecard's option to secure the PIN with a password unknown to the owner. In effect the owner would still know the PIN but couldn't access the balance in order to insure him not trying to screw the other party. Then his offer would be displayed publicly to everyone on my website and whoever wanted to take the offer could lock it with their own password.

At this point an offer on my site has an offer ID, it has an offering party locked with their own PW and an offered paysafecard PIN locked by my website and also the other side of trade locked by someone willing to take the offer.

This someone would then see the BitCoin address that the party that made an offer entered and send the before agreed upon amount. My site would then check new blocks for that address and when it found the matching amount transferred it would unlock the PIN and PW for the paysafecard PIN to the person taking the offer which they could access through the offer ID and the pw they entered to lock the offer with.

At this point the party taking the offer got the PIN + PW and is the only party that can now use the paysafecard and also payed the BitCoins which the party that made the offer received and everyone is happy and no one knows who any of the parties were.



It's basically an ESCROW but with one big problem: even though you can manually check the balance of a paysafecard PIN here https://customer.cc.at.paysafecard.com/psccustomer/GetWelcomePanelServlet?&language=en
you can't do it automatically, which I confirmed with paysafecard through email. So the only way my idea could work is if you had an actual person checking all the PINs offered and locking them manually or find another payment option like paysafecard that had the same type of features with the option to check the balance and lock PINs automatically.

The slide with the graph should make it way clearer what the rules of issuing and supply of BitCoins are.

So I'd change the title to "Issuing rate" instead of just "rate" and the text bellow I'd change to: "the total amount of BitCoins is fixed and limited"

There should absolutely be no doubt to anyone viewing the graph that you just wont ever have more then 21mio of BitCoins. IMO at least.

p.s.: awesome job so far, can't wait to see the final thing

This is actually a really good idea but I don't think anyone mentioned the proper execution yet. I'm not a programmer so I don't understand how one could code it but I do think the logic behind such a system should be as follows:

If you want to send me an email I should have an option to charge you with a tiny fee for receiving your email and actually reading it. For example, right now if I don't know you and I have no business with you but you know my email you can send me whatever for free and I may or may not read your mail. This system has two problems: 1st I was waiting for an important email but it got buried under spam, or even got categorized as spam and I missed it wasting extra time while waiting and 2nd I didn't know the receiver beforehand but I really wanted him to read my mail even though he may think it's just spam.

Well how to solve this problem? Simple! Incentivize it with BitCoins.

Say I get the option to charge you for receiving your email, for allowing your email to land in my main email folder where I get all the important mails that I always read, you pay a small fee to me which then becomes the key to my mail folder. You still get the option to send a free mail but it will land straight in the spam folder. So if you pay me a small fee you get preferential treatment. And 2ndley if I have a small fee setup I am certain that all the important mail I'm waiting for will land in my main folder and there's no chance for me to miss such an email if the sender payed the fee. It's a win-win.


Basically the fee should open the door to my main email folder. If you don't pay, you don't get in and both parties have something to gain! And besides if you're just writing back and forth between you and your say business partner none of you will get any richer. The only time it will cost you is if you don't get a reply and the only time you'll gain something is when people email you stuff you didn't really want to receive and you won't reply.


That's my idea, now you figure out how to make it into a code

Until you have to exchange bitcoins for some other currency to do most of your buying/selling you can't escape taxes any easier then you can without using bitcoins. I order for bitcoins to provide that option you'd need to have job paying in bitcoins and be able to buy/sell most of what you buy/sell in bitcoins.

The possibility is there but we're a long way off. Maybe in 10 or so years.

Is this how BitCoins could go mainstream?:

Peer-To-Peer Lending: The Free Market In Action

The internet is a beautiful thing, it creates opportunities to streamline so many things in our lives. It creates a marketplace where people can reach each other so easily. It has the power to decentralize authority and break down barriers. We have information sharing at an insane rate that people just 20 years ago couldn’t imagine, but I think we have yet to see the real power of the internet.

As the financial crisis rages on, a fairly new form of decentralized lending and borrowing is emerging through online sharing of money. According to a study by Grail Research, person-to-person lending (P2P) is a fast emerging trend that could seriously reduce dependence on banks. P2P lending is a form of micro-lending where an individual or a group lends money to a person in need without any intermediary or central authority like a bank.

More at: http://csinvestor.com/peer-to-peer-lending-the-free-market-in-action/

P2P lending: http://www.kiva.org/

We are a non-profit organization with a mission to connect people through lending to alleviate poverty. Leveraging the internet and a worldwide network of microfinance institutions, Kiva lets individuals lend as little as $25 to help create opportunity around the world. Learn more about how it works.

bid vs ask ratio from MtGox website is 38 vs 126 right now. So unless you're suggesting that because of the move people who'd normally put in bids didn't have access to the site I don't see how that event could have had any effect.

I agree. But what if the rate is too high and I buy BTCs and then a month later before I spend them the rate falls and prices readjust and I just lost all the value? Hmmmm?

How is this so tough to get, I really don't understand.

Yeah you are right. But the BitCoin economy is a truly free market.

And what do you think does an unequal bid vs ask ratio spell? Stability of the rate?

Really? It's hard to understand for you how the rate of exchange could play a role in whether or not someone decides to give BitCoins a chance?

Tell me something, if I show you a brand new invention that you might not even fully understand how it works would you be more willing to buy one for a cheap price or buy one if it were really expensive? I mean geesh use some common sense will ya..

Don't be childish, it's impossible to know. But I do see a 1 to 4 bid to ask ratio and I do know it's too high. Only the market knows how much though.

I'm not stuck I just feel that the current price of BTCs does not validate the gained value of advantages through it's use for most new to this economy.

Btw in your example you're assuming no one has to pay any fees in exchanging between USD and BTC? And are you also assuming there's no other perhaps cheaper option to purchase the same service with another currency?

I had to actually read back and see what exactly my initial point of this argument was because I agree with your statement in bold. But my initial argument was that we are already at that stage where the exchange rate is too high and that it will have to come down first before the economy can grow at a faster potentially exponential rate and and that the sooner the hoarders realize this the sooner the influx of new goods and services will happen..

My point is that the current exchange rate is not realistic and already too high and all my posts was basically theory supporting why that might be true.

Btw it's very hard to prove any of what I'm saying because there's a time component involved. But that's why the theory behind of it all is so important since it allows us to fairly accurately predict these future outcomes.

I commend you for actually doing some research but unfortunately you're applying the learned knowledge incorrectly. The article speaks about money and not local currencies which is what BitCoins are the most similar to atm.

If BitCoins were the reserve currency and all prices were expressed in BTC I agree with you, hoarding wouldn't have been a problem. But they're not. Prices are in USD and EUR and so forth and you need to first exchange your BTC for one of those fiat currencies before you can buy almost anything. Sure we already have a few services and goods that have it's prices expressed in BTC and those prices may very well fall if the price of BTC doesn't which btw is a function of supply and demand. But then what's the appeal of charging BTC for those services and goods if they could charge USD or EUR or other fiat currencies at a higher price? There isn't one.

So BTC economy will either keep it's exchange price and lower prices for goods and services offered for BTC which will eventually shrink the size of BTC economy or the exchange price will fall and which will raise prices and make the BTC economy more attractive inviting more goods and services in which will then slowly lower prices and this process will repeat until every good and service is priced in BTC after which moment hoarding wont be a problem anymore.

But if at any point along that path hoarders tighten too hard they'll drive goods and services out of this economy and put this process in reverse.

Please tell me where you've learned all this "wise" logic of yours. What research are you basing on your beliefs? Because you make no sense.


I base my logic on the Austrian school of economics and a lot of research on monetary policies and world wide current affairs.

People absolutely don't just buy USD with their JPY if there's a cheaper option. Why do you think the world is waging currency wars right now where they are each trying to win the race to the bottom of their currencies. Every major economic power with their own central bank right now is trying to devalue their own currency so that their exports are more attractive and they can raise more revenues through exports to cover their budget shortfalls.

BTC will have to get attractively cheap enough for more people to buy some more. I'm not saying people aren't buying them at the current price but what I'm saying is that there would probably be way more buyers if they were cheaper. I mean FFS look at the MtGox bid vs ask ratio, does it really not tell you anything???

I'm not saying I want the price cheaper, the market is! And the market currently thinks 0.88 is reasonable only because you have hoarders who have no serious competition and can afford to prop up their desirable price. I mean I don't blame them, they shouldn't be forced to sell lower if they don't want but all I'm saying is that this situation doesn't make the price reasonable and that it will have to come down if BTC wants to grow significantly before it can go up again. I mean FFS it's basic supply vs demand: Right now there's huge supply and low demand, what does that tell you? Prices have to come down, that's what. Any they will!


And please for the future if you're just having some thoughts in your head which you haven't actually done any research on keep them to yourself. Because making statements is not the same as presenting facts.

And it always will and those who wont learn this the easy will have to learn it the hard way.

Here's just one:

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You're welcome: 1BxLMkFb3qNBWWEtwSR4Y5ghwyjej2uPEf  

I strongly believe you are wrong in regards with the bold part because if the hoarders wont sell and the prices stays too high no one is going to buy and the BitCoin economy wont grow. The sooner these hoarders realize that and give in and start selling the better it is for the growth of the BitCoin economy thus they have a strong incentive to sell and lower the price to a more reasonable one.

And IMO and I'm pretty sure I'm not alone thinking like this, $0.90/BTC although looking great to someone new just finding out about BitCoins IS to high for the current volume and interest and especially the bid vs ask ratio.