How would regular currency (USD, EUR) work in a P2P exchange? I mean, we need to have something to exchange the Bitcoins for in the P2P exchange. How do we get the USD, EUR etc. in the system?
P2P is peer-to-peer or people to people if you want. So in a P2P exchange, there is no compensation, escrow or stuff like that. If you want to sell 1 BTC for 3USD, you find a buyer, you send him the bitcoins, and he sends you the 3USD directly (cash in the mail, wire transfer, whatever...) It's not as convenient, nor as reassuring as a centralized exchange, but at least it is 100% legal/bureaucrat free. I think it can be made to be as convenient. Not sure what you mean by reassuring...nothing about centralized exchanges reassures me...they've not exactly had a good track record from a security perspective.  P.S. Regarding the earlier post about Open Transactions, I am very familiar with that project (though I haven't experimented with the software yet). I do think the Open Transactions project might be trying to solve too many problems at once and that jeopardizes its adoption. I would love it if FellowTraveler focused on nothing but the infrastructure for a p2p/ripple like exchange for bitcoin and put a lot of the other things that open transactions can do on the shelf for a while. This is a very specific and acute need that bitcoin has. If it was solved, it would see broad adoption. |
|
|
|
|
Bitcoin is not a commodity though it shares some properties of a commodity (namely inelastic supply). That's a useful framework for thinking about how the value of bitcoin fluctuates and how it trades, but it does not make it a commodity.
Bitcoin is a protocol, but that doesn't really say much about why bitcoin is useful. However, it does give one a clue as to what gives bitcoin its fundamental value.
Jeff Garzik described it as a distributed digital notary service, which I think is a great description of the role mining and the block chain serves in bitcoin.
If I type in "definition of commodity" into google, it yields "A raw material or primary agricultural product that can be bought and sold, such as copper or coffee." Under this definition, bitcoin is not a commodity. A second definition says "A useful or valuable thing, such as water or time." You could make a plausible argument that bitcoin is a commodity under this second definition. However, when people use the term commodity in association with bitcoin, I think they are most often drawing comparisons with the inelastic supply of precious metals and fungibility. But inelastic supply is not a property that all commodities share (and even precious metals aren't as inelastic as bitcoin). And commodities are not innately useful as a monetary system or currency (not even gold until you fashion it into coins or bars to facilitate exchange). The term commodity is generally used in association with something whose individual units have some utility value, and that doesn't describe bitcoin. So, I have to disagree with the title of this thread that claims bitcoin is a commodity. It is not.
If I type in "definition of money" into google, it yields "A current medium of exchange in the form of coins and banknotes; coins and banknotes collectively" (among many other hits). This certainly does not describe bitcoin, however I think this definition might be too narrow.
If I type in "definition of currency" into google, I see "A system of money in general use in a particular country." That also doesn't describe bitcoin (because it's not in general use and it's trans-national), but I might again argue this definition is too narrow.
If you believe that the physical bills and coins that represent USD are currency, while the US dollar system in general is money, then under more general definitions of money and currency, you could argue that the bitcoin protocol is a system of money, while the actual software and transactions used for transferring bitcoins are the currency of that monetary system.
Personally, I think the website has about the best possible description when it says bitcoin is a p2p digital currency. That might not be desirable for legal purposes in certain countries, but I hardly think what the website says is going to sway rulings on bitcoin one way or another. Lawyers will examine how bitcoin is used in practice rather than focus too much on what some website says. The website should describe as best as possible what bitcoin is for the benefit of potential users rather than worry about how courts might view bitcoin. In the long run, users are what matter most.
|
|
|
|
So wouldn't the solution to this be to not transfer the money between countries? Ie. have a different exchange in each country and then an exchange would only need to store (and not transfer) the users' funds.
no, the problem is not transferring money to another country, the "problem" is storing your value, your credit, like a bank. when you transfer 200 $ to mtgox , you got a credit of 200 $ in mtgox, and you can also withdraw them, they are attacking on this point, storing money, to make it simple. P2P exchange would be a good solution...and probably one that no govt would be able to stop...orders need to be announced on a p2p network with matching engines that pair up orders and find a ripple like path to transfer personally issued debt coins. A distributed routing protocol (similar to BGP) could find optimal paths of credit through the ripple network. Orders could include a fee that the matching engines collect. Nodes can monitor the order flow to piece together an order book. Super nodes in the ripple network could connect lots of users to one another (super nodes could allow people to purchase a certain amount of credit). People settle up their debts as desired. The first step would be to figure out how an order would look (which would be partially completed transactions) and how a matching engine would finalize the transactions. |
|
|
|
http://www.marketwatch.com/story/bitcoin-is-the-latest-alternate-currency-to-crash-2011-10-21?link=MW_latest_newsI'm not sure whether this is good or bad. John C. Dvorak is notoriously bad at making tech predictions. He has a very US centric point of view in this article and fails to discuss bitcoin's decentralized architecture (and how that makes it unique among previously failed attempts at digital currencies). I my opinion, the question of whether we'll all be using trans national digital currencies is a matter of when, not if. It may or may not be bitcoin, but it's here to stay in one form or another.
|
|
|
|
You also need to provide the merchant with the private key to sweep the funds.
Isn't it all in the transaction itself? It would be the same packet you'd broadcast to the network. (Ah, just realized you'd need to know the merchant's address, so what I'm thinking wouldn't work for dynamic addresses, i.e. the user would have to scan the store's QR code first.) You got it.. We're trying to avoid needing a camera on the customer phone. We may be limited to web only apps on the iPhone. No need for more than one initial address for loading up the device and you transfer the exact amount to the merchant. No need for Internet connectivity, a camera, or any other wireless communications on the customer device (at the point of sale).
I also think this would be easier for the user since it would require no key management. I imagine it would be accompanied with online services that keep your wallet in encrypted form, so that you can use the service to display your wallet but would have to download/sync in order to spend them (though it could just be a local javascript page like WebCoin, so the "downloading" part would be transparent for the user). From the user's end, basically the app would sync instantly when it has Internet connection, which would hopefully change nothing if the store successfully broadcasts the transaction. Yeah, you could have a full wallet, the only thing you need to do in advance is stage the funds needed to a single address (that minimizes the size of the transaction that has to be given to the merchant). |
|
|
|
Anyway I think we must focus on using decentralized exchanges such as bitcoin-otc or stuffs like that.
+1 |
|
|
|
This is very 'low tech', we're not sharing transactions, just bitcoin keys, and in a controlled way
It doesn't seem very appealing to me, maybe because it looks like a hack rather than a solution, mainly because of the "change" problem. [So I think a complete transaction needs to be transferred from the user's device to the store's computer. Fewer problems (you get your change back, can spend all the money from a key in different times, don't have to divide into reasonably-sized several keys in the first place, etc.), more secure.]I think information density is not a big problem, a few hundred bytes can be transferred through the display, even if a single frame QR-code might not be enough in some odd circumstances. A more colorful encoding or an "emergency" multi-frame scheme could be used, but I'm guessing it wouldn't be necessary in most use cases. So, I think this would be the perfect solution for POS: - User transfers his wallet (or a few keys) to the smartphone using the app when a connection is possible.
- On POS, enters the amount to be transferred and an image appears [containing the transaction], which is scanned by the store. Store trusts the transaction after waiting a few seconds.
- App keeps the account of spent coins as if it were connected to the net, so that a double-spend will never happen. User can spend all the money on the device.
- The transactions show up on the thick client, or the service provider's web page. App re-syncs when it has connection again.
Exactly...this is what I was describing in my post. You also need to provide the merchant with the private key to sweep the funds. No need for more than one initial address for loading up the device and you transfer the exact amount to the merchant. No need for Internet connectivity, a camera, or any other wireless communications on the customer device (at the point of sale). |
|
|
|
If you mean that the QR code scanned is a transaction itself, then there isn't enough screenspace to produce a QR code large enough to reliablely hold a transaction. But nor would it be necessary, if an android client were developed with my original specs for the bounty. Namely the ability to directly commune with another client; such as by multicast over a shared open hotspot (internet connection helpful, but not necessary), bluetooth or (ideally) Dash7.
That might be better than requiring internet connectivity, but it could still present a problem if the buyer has to set something up to do the communications. I'm interested in the potential of a solution that requires no communications at all other than the display. The transaction would be about 300 bytes (1 input, 2 outputs). The private key is 32 bytes. I think you might be able to do that reliably on a typical smartphone screen with 8 bit encoding. |
|
|
|
honestly this already exists in terms of a ewallet. Just put your 20 coins there... access your ewallet when your shopping via your iPhone / Android / whatever.. and when your done you can just dump what's left on the ewallet back to your desktop. All the features you just described are already on most ewallets..
No, it's not the same thing. The solution being discussed here does not require a third party that has control over private keys. It also does not require the buyer to have an internet connection at the point of sale. |
|
|
|
This eliminates the need for connectivity on one of the devices, but doesn't eliminate the need to wait for confirmations.
It seems the only way to decrease POS time is to use a trusted third party.
You do not need to wait for confirmations...using a trusted third party has its risks as well. If you wait on network acknowledgement of a transaction for just a few seconds, the risk of it being a double spend drops very substantially. So close to zero that for small transactions, there's no need to wait on a block. You will also be able to get insurance against losses under those circumstances. Don't forget that when you get home and find your new videos are fakes you are SOL. Should have paid that extra few percent to a third party for fraud prevention You mean just like when you pay with cash? |
|
|
|
|
Neat idea!
I think you could improve upon it in this way:
- move 20 BTC into a single address for which the phone has the private key
- upon payment, the phone generates a new address and private key and moves the exact amount owed to that address (with change sent back to the original address)
- a QR code with that transaction and the private key is presented to the merchant (not sure if that would be too much to put into a single QR code)
- merchant publishes this funding transaction and a new transaction that sweeps the funds using the private key
There is no need for the phone to have good internet connectivity at the point of sale and you don't have to trust the merchant to provide change. The merchant can also tack on whatever transaction fee to the sweep transaction that they think is necessary for the transactions to be included in the block chain in a timely fashion. The merchant software can clear this transaction in just a few seconds by announcing and monitoring that a high percentage of nodes agree that they are valid transactions.
You can also make it such that the wallet software keeps a backup of original key on the phone (in case you lose your phone, you could have your wallet sweep everything that was on the phone and not lose any BTC).
P.S. You can also make it so the funding of the phone can be done wirelessly and remotely (with a wallet that is in some way remotely accessible). I think this solves an issue with the phone requiring connectivity right at the moment of the sale. There are plenty of times when I've wanted to access a web site and my provider's mobile internet wasn't behaving well (or I happened to be in a dead zone). Loading up a few spending bitcoins ahead of time is perfect if you have the ability to do it even while roaming about.
|
|
|
|
|
I'm interested to see if the short squeeze prediction pans out. I think it would be the first short squeeze (of any significance) for bitcoin. It kind of makes sense...being able to short bitcoin is a relatively new capability and I suspect people might have overdone it. I'm sure the people that created Bitcoinica felt BTC was over priced and could make money by shorting it...I'm sure they also anticipated people loading up on the short side as they figured out how to use this new toy and are well positioned to take advantage of a short squeeze.
|
|
|
|
He deposited bitcoins, and held a long position, while prices fell. He then got a margin call. Long position. No shorting. None.
He also had a negative USD balance. Therefore, he was long on margin and was called. (I'm assuming his BTC balance was not enough to cover the negative USD balance as the price of BTC fell) |
|
|
|
One thing hindering economic development is the price. People do not want to spend BTC when they are valued this low. My sales go away when bitcoin is dropping.
This is unfortunate...and the wrong way to look at. If you're concerned about draining your bitcoin balance by buying something, just buy additional bitcoins to cover the purchase. It may be a bit more of a hassle, but it supports the bitcoin economy. And look at the flip side, if you're allocating a portion of your income to bitcoin savings, then with each paycheck, you're able to buy more bitcoins as the price falls. |
|
|
|
|
You do have a point that people sitting on 100,000 bitcoins have a lot of spending power that isn't being utilized. They might not be in a position to buy more bitcoins and purchase, but they could dip into their savings and make purchases to help get the economy going. Note however, that this too would cause the price of bitcoin to fall further (but that's okay too).
|
|
|
|
Expect the Fed to enforce this or try to make it mandatory across America. IMO another sign that the Federal Reserve Note is losing its grip by introducing strong arm laws like this.
This has nothing to do with the Fed... It is ironic that a state has now passed a law making it illegal (in some cases) to use the FED's currency. I think you could make a case that this law contradicts the federal legal tender laws. Especially if you exchange these goods for credit that the buyer later wishes to settle with FRNs. Later could be a few seconds. |
|
|
|
|
Why do you assume that the amount of bitcoins that one spends is in any way affected by the amount of bitcoins that same person saves (as I prefer to call hoarding)? You can use bitcoin earnings, spending, buying and selling to adjust your savings balance, but the decision to buy something or not doesn't have to be related to your desired level of savings. Someone with 100,000 bitcoins can spend as many or few bitcoins as they like without dipping into their savings. All you really need to encourage is for people to spend bitcoins instead of other currencies whenever possible (and go to the extra effort that might be required to do so...because going to that extra effort benefits the bitcoin economy). There's no need to call upon people to reduce their savings.
|
|
|
|
|
I'd like to know how they intend to enforce this...this law will end up turning the majority of Louisiana residents into criminals. I think once >50% of the population is considered an outlaw by the government, you've reached a point where it's not the people that are the outlaws, it's the state.
|
|
|
|
I will soon be implementing something like this into the bitcoin markets project. Something like what? Everyone can have a consolidated market depth with a simple script. What we don't have is the ability to issue a buy/sell order and have it filled at the best possible price from any exchange. I was thinking BitInstant might be in the best position to do something like this...since they already do provide services across multiple exchanges. It is worth noting that such a service would itself quickly become an exchange (since matching orders that both originate on it's own service would be cheaper than hitting one of the existing exchanges). Whether it's BitInstant or one of the existing exchanges that implements this, I think they'd quickly gain a lot of volume. |
|
|
|
|
Mt Red appears to be down (not sure if it's related to the DDOS).
|
|
|
|
|
Show Posts
