... The legal status is unknown although I do know that it's not legal to run an unlicensed centralized exchange.
...and if someone bites the bullet and starts a licensed exchange, the fun's only starting -- where to find registered securities to trade??? It's not currently possible to start a licensed exchange. There aren't any laws to make it possible. The first step is to start a lobbying effort through DATA http://datauthority.org/ to create a new set of laws to make it possible. Otherwise the decentralized route will be the only path left to take. I might be wrong but aren't campbx and coinbase operating legally in the us?
And I completely agree with your two solutions. We either need a fully decantralized exchange (like colored coins) where these sketchy stocks can prosper freely, or a regulated centralized exchange that would probably be more expensive but I would be willing to pay for better insurance.
I think we will end up with both. It's a Napster type situation where Napster has just shut down and we all know what happens next technologically. It's inevitable that a decentralized exchange will happen and the region lock was probably the single decision that was the impetus for it. Ukyo's decision will have a ripple effect. The technological solution is not a long term solution, it's a bootstrapping. The technological solution will eventually be regulated and that will be the long term solution. A centralized exchange is a legal impossibility according to the vague US laws. You can thank the lack of foresight of US politicians for that. DATA authority may be able to bring some foresight into the lawmaking process and we probably need think tanks for this space. |
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So, we've all had our fun scoffing at regulators, but now that we've got that out of our system (and our portfolio's are down 60%) are we ready to make a regulated US exchange?
This would have the perks of inviting more liquidity from larger market participants, as well as more stability and predictability.
Playing around with other experiments such as decentralized exchanges and colored coins just invites unpredictable illiquidity and instability.
The Securities and Exchange Commissions offers plenty of regulatory exemptions for the kinds/sizes of companies that have so far "IPO'd" in bitcoin land, the exchanges might have a more uphill battle but its time to cross the bridge
First you have to lobby the congress and get them to pass a law to define what a Bitcoin exchange is and what the rules should be. The SEC has no exemption for Bitcoin and it should either create an exemption or customized laws will have to be constructed based on the advice of the Bitcoin community and the lobbying efforts which Bitcoin businesses will have to work for. I see no easy way of creating a regulated Bitcoin exchange in the next 6 months unless somehow the people in DC who can't even pass a budget can be made to get off their asses and pass a Bitcoin specific bill which you and I know probably wont be happening in 2013. This is why all the talk of a decentralized exchange is gaining steam, there seems to be no way to do a regulated exchange forcing people to figure out a technological solution. My opinon, push the technological and political solution simultaneously. Since most of us are programmers and not politicians, which solution do you expect to be popular on Bitcointalk? Why? What's the point? There's plenty of exchanges now. Heck ASICMiner could be on an exchange in a week by going reverse merger with a shell. Would probably get a higher valuation then now and since they don't mine they aren't even remotely shady or unlicensed in any way.
They could go on the NASDAQ but that isn't a Bitcoin exchange. It probably wouldn't let anyone in the Bitcoin community buy shares so what does that have to do with Bitcoin? That is like telling someone with Euros to register with a completely different system and currency in order to trade shares in Dollars. Only in this case Bitcoin isn't a national currency and all the regulations on the books don't really apply to Bitcoin as Bitcoin is a type of barter. So if you set up an unregulated unlicensed exchange to trade baseball cards, then at what point does the SEC regulation apply to that? What if the baseball cards are virtual baseball cards on the Internet? Then what? If you're not trading in dollars, it's just not realistic to regulate in that way. And if Asicminer is made to go to the Nasdaq they would have to sell out the entire Bitcoin community. Why would that be an alternative? Exactly. Options exist for legitimate companies but require trading in USD, which also has the benefit of exposing the security to a much larger market of investors. The BTC denominated securities market is too small, and costs of compliance too high, for there to be a legit BTC denominated exchange in the foreseeable future.
I'm glad you see the situation clearly. It's not possible to start a regulated Bitcoin exchange until after a critical mass builds up from the unregulated Bitcoin exchanges. It's supply and demand. At this point all the region locks have done is create demand for a decentralized exchange. Demand will build up there and then when there are millions or perhaps billions of dollars to be made a Bitcoin specific exchange will come about, that or lobbying efforts have to be made in the next 6 months to create some rules specifically for decentralized exchanges or for centralized exchanges running decentralized technology. Law enforcement does not want money laundering and I can understand that. The community is going to have to propose both a technological and political solution. The political solution could rely on centralized exchanges with know your customer or whatever but the decentralized technological solution could ID people as well. The real question is why should people have to be ID'd? Dark money flows into political campaigns through PACs which don't have to be identified. There is a legit need for laws and regulation in this space to protect people, but too much law and regulation hurts people. |
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There should be a banner on the homepage saying "we will in no way attempt to comply with the US law". Do we have any actual details as to why these exchanges are shutting down? As far as I am understanding they just aren't complying with SEC's standards which don't seem too unfair in my opinion. I would love a bitcoin based stock exchange that actually does comply with US laws sort of like how many bitcoin exchanges operate legally in the US.
I don't think there are any bitcoin exchanges operating legally in the U.S. It is possible that there will never be. There currently aren't and yes that is possible. There are only two solutions. A) Technological via a decentralized exchange. B) Political via lobbying efforts to pass laws for customized regulation to cater to our needs. I think both solutions should be pursued simultaneously. If lawmakers don't listen now, they'll listen when the tools are made and the pressure builds. Lawmakers can get together to pass a law to allow for Bitcoin exchanges but until that happens the technology is unregulated. The legal status is unknown although I do know that it's not legal to run an unlicensed centralized exchange. |
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Just so we're clear, I agree with the spirit of your argument. I also believe the technologies you've mentioned have both a positive impact on humanity and are, for the most part, beyond the reach of overt political manipulation. My point is that the realm of business and politics (and really I'd like to divorce the two from being lumped together because it's inefficient, ignorant, outdated politics that are the issue here - business is both beneficial and necessary) always come into play. I don't think we really get away from that. At least not in the way society operates today.
I think each person has to at some point make a decision on whether to choose to be politically loyal, or loyal to the community as a whole. For instance if you're in a position to make a decision which affects thousands of lives, for example thousands of college students are using file sharing programs to share movies and music, and there are businesses trying to have those students arrested, sued, taken to court, or some other similar policy, then at what point do you figure out that the enforcement policy is doing more harm to the economy and to peoples lives than the file sharing? The politicians who set regulations often have no understanding of how important a technology is or the consequences. Then their own sons and daughters wind up using it and that is when they get a clue that it's a big thing. At this point almost anyone who has been on the Internet has at some point committed copyright infringement, so if the policy were to sue each person who did that even the whole Internet would be sued. Prior to that everyone who taped songs off the radio or on their VCR were breaking with some rule/law. Some of these regulations are either technologically unenforceable, or socially unenforceable. I think a decentralized exchange is now inevitable for the same reason that a successor to Napster was inevitable. In the case of Napster you could have said that certain corporations had a reason to want to take it down because of copyright infringement. That same case cannot be made with Bitcoin stock markets, while it is a very disruptive technology the economy is in such a state that it would probably do more to stimulate the economy than the regulations would do. And if it's about the economy, and about people, and not about legalism that only the best lawyers can make sense of, then the decentralized exchange (at least on the backend) is a good technological solution to improve the state of the economy. Legalism: In Chinese history, Legalism was a philosophy emphasizing strict obedience to the legal system. It was one of the main philosophic currents during the Warring States period. It was a utilitarian political philosophy that did not address higher questions like the purpose and nature of life.[1] The school's most famous proponent and contributor Han Fei believed that a ruler should use the following three tools to govern his subjects:
Fa (Chinese: 法, p fǎ, lit. "law"): The law code must be clearly written and made public. All people under the ruler were equal before the law. Laws should reward those who obey them and punish accordingly those who dare to break them. Thus it is guaranteed that actions taken are systematically predictable. In addition, the system of law, not the ruler, ran the state, a statement of rule of law. If the law is successfully enforced, even a weak ruler will be strong.
Shu (術, p shù, lit. "method"): Special tactics and "secrets" are to be employed by the ruler to make sure others don't take over control of the state. Especially important is that no one can fathom the ruler's motivations, and thus no one can know which behavior might help them get ahead, other than following the laws.
Shi (勢, p shì, lit."legitimacy"): It is the position of the ruler, not the ruler himself or herself, that holds the power. Therefore, analysis of the trends, the context, and the facts are essential for a real ruler.
Legalism and Individual AutonomyThe Legalist philosophers emphasized the primacy of the state over individual autonomy. The lone individual had no legitimate civil rights and any personal freedom had to strengthen the ruler. Han Fei, in particular, would be very caustic towards the concept of individuals rights. Fundamentally, the Legalists viewed the plebeian (common people of lower class) and their actions as evil and foolish.
However, Legalism allowed the common people to gain in rank if they performed well. For example, soldiers would gain in rank according to the number of heads the soldiers collected. A soldier may even gain noble rank. In contrast, some other states allowed only the well-connected to gain higher ranks. An example of this would be Lü Buwei, who originally a merchant, was able to become Chancellor of China, an occurrence that would never happen in the other six states. He played a major role in King Zhuangxiang of Qin's rise to power.
https://en.wikipedia.org/wiki/Legalism_(Chinese_philosophy) It's true the IRS wants people to pay taxes, that is the one argument I can understand. I think the tax regulations could come later after the technology is built. If people are receiving dividends and cash out then it's taxed obviously, but I also know that if Bitcoin reaches critical mass then it will be taxed. That shouldn't be something technologists, programmers, or users worry about though. The IRS should figure out how to tax it after it's built, similar to how there are now Internet sales taxes but that didn't happen in 1995 prior to the critical mass. |
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I understand your feelings and constraints. The business and political world move a lot slower than science and technology. The only thing I advocate is that the business and political world do not interfere with scientific or technological progress.
To be totally fair, that's a pipe dream pure and simple. Science and technology don't advance without the business/political side. I'll agree that one is usually better at keeping mustard off its shirt, but as a whole, we're only as fast as the slowest member. TCP/IP,WWW, Bittorrent, Bitcoin, Email, Linux, none of these technologies had any business or political side when they were created. They were created and then after the fact the businesses were built around them. Tor was not created for any specific business or political reason, it was created for military purposes. The Internet was created for military purposes. We could make a case that Bitcoin and Bittorrent were created with political use cases in mind, but the idea to create cryptocurrencies existed long before Bitcoin. Ask anyone who studies these topics and they will tell you that Bitcoin was not the first attempt, Bitcoin was just the first attempt to get it right and do it in a way which couldn't be shut down. If you mean political as in politicians deciding whether or not a technology should exist? That isn't how the world works. A lot of technologies exist that politicians never thought possible. Politicians didn't think P2P would become popular. The MPAA/RIAA who were the most politically connected businesses at the time didn't know what to do about Napster, Gnutella, or Bittorrent. Pirate Bay was a technology before there was a Pirate Party. Bitcoin is a technology which can make people's lives better. Once people figure out how it can make their lives better businesses form around it and then political stances change. The same would happen with a decentralized exchange protocol, at first people wouldn't know what to think of it but then businesses would form around it and pressure would grow to legitimize it. Sooner or later it would be regulated in some fashion, but the point is not to let regulation get in the way of progress. If 500,000 lives will be at risk because of regulation preventing a technology which could save 500,000 lives then at what point do you figure out that the regulation is putting the lives at risk more than the technology? If regulation for instance is completely unworkable, how long do you think it will be before the regulation hurts the economy? The case we have here is a situation where politics and regulation are hurting the economy, negatively impacting thousands of lives, and because of the slow rate of politics in DC (not talking about politics on Bitcointalk or elsewhere), the ignorance of DC on how important a particular technology is could cause hundreds or perhaps thousands to go out of business, result in losses of jobs, and then politicians in DC will complain about high unemployment rates, expensive social benefit programs, and big government. You cannot have it both ways. Either you believe in science and technology or you believe in politics. Business is neutral and will use any tool, but many politicians are luddites who don't even know how to make sense of what is coming. They are too busy fighting over the budget to pass a law to make Bitcoin exchanges fully legal. |
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The talent we have attracted has far exceeded my expectations, and the progress they are making is way more than I had hoped for. I'm not looking for new talent at all (although more are welcome to join if they are interested in participating).
I figured it would take us maybe three or four months to get as far as we have gotten in one month. I couldn't be happier. Our guys are absolutely rocking this project, and I think everyone invested in MasterCoin should be glad we have them.
Why not go to ODesk and announce it there? Plenty of unemployed talented programmers who would be interested. |
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At this point the market is demanding decentralization because central exchanges cannot be trusted. The only options for US investors are a Canadian exchange which most likely is going to region lock US citizens at some point, an obscure exchange somewhere in China which only has Asicminer shares and which most Americans don't want to have to deal with, or the decentralized exchange. Sure you can build a web front end for a decentralized exchange, but that is the only way it will work for everyone without unacceptable risk. If no one can wipe the order book because it's the blockchain, if no one can region lock and leave it up to each individual issuer, then you have a lot less risk.
I have the opposite response. At this point, the market needs a real, legitimate bitcoin stock exchange that is compliant. Your focus on what might improve about a decentralized exchange completely ignores all of the things that would be made worse. Right but the problem is compliance may be impossible for a Bitcoin stock exchange. The SEC does not have Bitcoin specific laws and doesn't even seem to know what Bitcoin is. Congress has not figured out how to regulate Bitcoin. There simply does not seem to be a way to be compliant with crowdfunding laws as vague as these. Maybe in a year or two but a year in the Bitcoin space is an eternity. I agree we need a legitimate and compliant stock exchange but if it's not possible to have one then the decentralized exchange will come online due to the demand. If the SEC makes it impossible to comply, and if Congress does not create regulations which make some sense, then it's an unavoidable consequence. It has been considered from the outset and things are progressing as fast as the business world outside of Bitcoin operates.
No one wants a smooth long term solution that isn't just a band aid more than me. I would much rather spend my time (I assume all those invested would too) building and running the business without additional time being demanded from my days with having to problem solve on this front too.
I understand your feelings and constraints. The business and political world move a lot slower than science and technology. The only thing I advocate is that the business and political world do not interfere with scientific or technological progress. This is why I say the decentralized exchange technology should be built, not because I think society will instantly know what to do with it but for the same reasons Bitcoin had to be built to push society forward. Politicians aren't the type of people who can push society forward. They don't like to change anything even when science and technology make the old ways obsolete. Business is restrained by the politicians who wish to suppress technological progress to win political points with corporations and special interest groups that back them. The best solution for NeoBee investors from the USA at this time might be to sell their shares and buy back at a later time. Havelock represents too much risk and the only way to mitigate or reduce that risk is through technological innovations such as a decentralized exchange. I intend to buy shares in NeoBee when it's possible to do so but there is no compliant exchange and probably wont be for a period of several months. Just know that I intend to buy shares immediately when the option exists, just as I intend to be a customer when the option exists. |
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The reasoning behind using a platform and not direct handling of shares for ourselves is down to the man hours required to operate on such a basis, we are operating in the real world, we have multiple aspects of the business that need constant oversight and attention, for myself to assign someone for the task is achievable however it comes at a cost to the business, we as a business do not specialize in the trading of shares or have a platform capable of doing so (at the moment) so the best solution is to operate using the platforms available to us. Do things need to change surrounding these platforms? YES they do, whilst we are investigating the matter in great detail we cannot provide a solution overnight.
Additionally, people need the convenience of being able to trade on an exchange. The forum tends to respond in extremes, first people will yearn for decentralization, private shares, etc. But if that's where they started, they'd be yearning for convenience, etc. Neither way is wrong or right, but it's certainly more useful (to all parties) to have a platform. This is the same argument used to defend Facebook. Privacy being sacrificed for convenience... We need security over convenience in this particular demographic. How many exchanges have to shut down or implement region locks before people understand that the model is insecure/failing? Also with thousands of Americans locked out the centralized exchanges aren't a realistic option long term. Sure for a month or two Havelock could work just fine, but then it could lock out Americans too and each time this happens money is lost, trust is breached, and these people aren't going to be going back to centralized exchanges. So when you say convenient you must mean for the people who aren't region locked. You must mean the people who weren't using btct when the order books got wiped clean and the site announced it's shutting down. That kind of stuff never happens on a real stock market. What about when MtGox did that cool down period, when the Bitcoin price was hacked or collapsed this April? Look at the response to that event where MtGox went from being the number 1 centralized exchange to the situation now. The market share has changed drastically and it will be no different here. The consequence for region locks and midnight shut downs will be felt because that is the way of the market. At this point the market is demanding decentralization because central exchanges cannot be trusted. The only options for US investors are a Canadian exchange which most likely is going to region lock US citizens at some point, an obscure exchange somewhere in China which only has Asicminer shares and which most Americans don't want to have to deal with, or the decentralized exchange. Sure you can build a web front end for a decentralized exchange, but that is the only way it will work for everyone without unacceptable risk. If no one can wipe the order book because it's the blockchain, if no one can region lock and leave it up to each individual issuer, then you have a lot less risk. |
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Colored coins do exactly what you want - they don't need a new blockchain or a change to the Bitcoin protocol, they allow representing arbitrary assets and contracts with atomic trades, and already have working (though experimental) implementations for a color-aware wallet and p2p trade. bitcoinx.org is outdated, soon http://coloredcoins.org/ will be up to provide information. In the meantime here is a promotional video: http://www.youtube.com/watch?v=fmFjmvwPGKUI see people have mentioned Mastercoin, it's much more ambitious but is also technically inferior, and more centralized (Mastercoins were issued with a time scale factor of 1 month). It's also crowdfunded, which means Mastercoin will probably be developed faster and better. For that reason I don't think it can be considered technically inferior. Maybe you mean conceptually inferior? But none of the colored coin implementations are going to be superior to Mastercoin when Mastercoin has so much momentum. I do agree that it is a bit too centralized, dacoinminster has most of the Mastercoins and it's almost like Ripple. The code is open source though so even if that is the case the code can be adapted as needed to other projects. I just think the code written for Mastercoin and the organization around developing it is far superior to colored coin which seems to be stalled in its progress by comparison.
very disappointing when i go to mastercoin.org
the 52 seconds introductory video does not explain what Mastercoin is, its just showing a logo splash screen, wth?
https://sites.google.com/site/2ndbtcwpaper/Colored coin doesn't even have a site. See what I mean? |
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The chessmoney.com website faq says that some states disallow online gaming for money even if the game is purely skill based and has no random chance. It lists the following states as disallowing playing chess for money: Arizona, Arkansas, Delaware, Florida, Iowa, Illinois, Kentucky, Louisana, Maryland, Missouri, South Carolina, Nevada, Ohio, Washington and Vermont. https://www.chessmoney.com/cm/main?page=faq#faq11I also found on Yahoo answers a question where the person said he made over $1000 on PlayE4 chess but couldn't withdraw the money because playing chess for money is illegal in Washington state. http://answers.yahoo.com/question/index?qid=20090210183008AADK6Dy Can anyone confirm if these statements are correct, wrong, or misleading? Also it would be interesting to ask the same questions about bitcoin instead of money. How would people like Bobby Fischer have made a living if playing Chess for money is illegal? |
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http://www.coindesk.com/why-do-so-many-chinese-bitcoiners-use-linux/It becomes pretty obvious after looking at a few factors that the only reason the Chinese are overwhelmingly using the bitcoin client on Linux for mining coins is to solve cryptographic problems in order to unlock additional units of BTC. And that makes sense because resources can be better pooled using Linux than with other operating systems.
This may be one of the biggest indicators that it is the Chinese who may be the biggest miners of bitcoin overall, and that shouldn’t be surprising to anyone who has been following the ASIC mining race. Info from May 2013 http://thegenesisblock.com/mapping-bitcoin-adoption-a-global-perspective/ It's because Linux is open source. What else would they use? An OS controlled potentially by the NSA? |
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We've been trying to get high paying banner advertising for devtome for the last few months, but the six fiat networks contacted, including adsense, were not interested in devtome. I guess that they want either a really popular website, or a small website that is on one topic. We do have bitcoin banner ads, but they pay very little. We'll reapply to fiat networks in a few months when devtome is more popular. However, we did get accepted to the Amazon Associate program, and all devtome writers should get a tracking ID by listing their name on the devtome Amazon Associate page: http://www.devtome.com/doku.php?id=devtome_amazon_associateAny sales from the tracking ID will be converted to devcoins and sent to the writer. Besides making affiliate links on devtome, writers can also use the tracking ID on their own website or blog, and those sales will also be converted to devcoins and sent to them. You can use the links in text, and/or image links. The affiliate revenue will be small per month, but it's ongoing, you can collect it forever. If someone uses their tracking ID in spam or something scammy they'll be dropped from the devtome Amazon Associates list. Eventually having Amazon links in devtome text will also count to the earnings multiplier, with a low weighting of probably around 20%. Why not go with micropayments? Coinbase finally makes it possible and so do some others. |
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What's Mastercoin? Excuse my ignorance... with the over 100 scam coins out it's easy to lose track of every new coin.
Mastercoin is not an altcoin. It's a layer built on top of the Bitcoin protocol. http://www.mastercoin.orgI think Mastercoin has the most potential. Colored coin doesn't have the same kind of momentum because Mastercoin has thousands of Bitcoins to fund development and has already been crowdfunded. I suggest you all just go to the Mastercoin thread and work on that, the bounties are already set up. https://bitcointalk.org/index.php?topic=292628.0https://bitcointalk.org/index.php?topic=265488.0 |
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Could the same argument not be made for bitcoin itself? Specifically the proposed inevitable centralization of mining? Mining will grow centralized over time, it's already happening. Bitcoin itself is not as simple to put in this box, as bitcoin is first a protocol, second a commodity, and third a currency. Arguably none of those things are centralized nor decentralized, as they are concepts, not services or products or the like. It's only happening with Bitcoin. It's not happening as quickly with Litecoin. You're right that mining as it currently is set up will become centralized over time. However it should be the role of the community to philosophically design future protocols in altcoins and future technologies to resist centralization for as long as possible and to maintain decentralization for as long as possible. It's very much like saying that over time any encryption will probably be broken or any technology will eventually be hacked. In information security it's usually not the math that breaks first, but the people. People are usually the ones who get put in central authority and become corrupt as power goes to their head. We should expect to see that in the Bitcoin community just like it exists in every other community. The design of any protocol should have precisely that in mind and consider the human the weakest link in the protocol. Any protocol which relies on faith in the goodness of humanity is doomed to fail. The protocol which relies on faith in mathematics has a chance. Mathematics say you have no absolutely secure system but you can improve the security of an information system by making it extremely expensive to break it. If it's very expensive to break it's not as likely to be broken. Bitcointalk was cheap to break, Bitcoin is expensive to break. The reason Bitcoin is expensive to break is because of the hashrate making a 51% attack expensive (but never impossible). If mining became centralized into one centralized authority then it's already broken because whoever controls that already owns Bitcoin. This is why altcoins have to constantly be created and why users should not be too attached to Bitcoin. When each altcoin has a different group of miners mining it with completely different technologies then it makes it a lot more difficult to centralize. Some coins will only mine with CPUs, some will mine with GPUs, some like Netcoin will require a bunch of different hardware which will routinely switch, and in my opinion that is where the actual arms race is. It's not in mining, or in who can get the most hashrate, it's in who can design the most secure and decentralized technology to cater to and facilitate the cryptocurrency community as a whole. The cryptocurrency community's needs can be represented by where the money is being spent and what the community likes to do, because as of right now we don't have much in the way of voting. There are risks and benefits to any tool. I do not advocate creating tools which have far more risks than benefits. I do not advocate creating tools which create victims or which hurt people. In the case of a decentralized stock market I don't believe that tool hurts anyone. It's as neutral as Bitcoin itself is and the only people who wouldn't like it are people who control the current centralized stock market and even those people know that crowd sourcing laws are coming online. The writing is on the wall. |
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I think that simplifies it too much. While there may be some forces that act in the way you describe, the concept is more abstract and powerful than greed or control freaks.
Greed and control freaks are the fuel behind centralization and always have been. It's a human process driven by human behavior. It's not just greed and control freaks. Information starts as disordered data and over time it becomes structured and ordered as it interacts with human minds. The human mind naturally puts information into a certain order and centralization of some sort is necessary to allow particular information to reach all parties in the optimal amount of time. What I mean is, we still benefit from having just one website url to memorize rather than having to memorize a random string of characters. This reduces the domain name to being a single point of failure but we accept this as a necessary convenience to allow people to locate and access information. But that isn't at stake with centralized vs decentralized exchanges. Yes to a certain degree there will still be a need for websites to host certain information but the blockchain is the most central source of information and we don't really need anything more centralized than that. Anything which we need to be centralized in my opinion should be centralized into the blockchain where no one can own or control it and where no trust is needed to manage it. It becomes one with the ultimate source. The price of different shares or bonds will be representened as transactions on the blockchain and then there is no reason to pay transaction fees to centralauthority.com which could decide to do a region lock. This isn't the first instance of religion locking. Gaming companies like Nintendo and Blizzard are notorious for region locking players for no apparent reason. If Nintendo or Blizzard were distributed and decentralized corporations registered into the Bitcoin blockchain itself, with shares built into the blockchain itself, and everyone working for it paid in their coins which represent stock which can be traded, this would change how we do business. You could start your own corporation called YourCorp, you could issue YourCorp stock on the Bitcoin blockchain and call it YourCorp coin or YourCorp stock. People could work for YourCorp coin and get paid in that. It would be like each corporation has it's own ability to issue its own alt-coin, it's own stock, each with it's own unique features. YourCorp could sell video games and say only people who have those coins can buy their games. Suddenly there is massive demand for their coins and everyone who was an employee who got paid in it can sell the coins for Bitcoins. Yeah there are people who will say "but what about regulations?" but regulations shouldn't get in the way of innovation. Innovate first and figure out how to regulate it second. If you regulate first then regulation will destroy the US economy and keep the world in a recession. |
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It's not my concern what you think of my own opinion, and this does not come from self-interests. It is factual observation.
Centralization in terms of information security also means introducing a point of failure. Too big to fail is the result of centralized banking. That is a factual observation as well. Centralization happens for many good reasons, including, convenience, trust, and profitability for all parties. Decentralization doesn't compensate for those values, it merely breaks them into smaller pieces.
Why not put your money in Bank of America? It's a nice centralized bank. Sometimes you're correct that centralization has some security advantages when trying to protect the gold in Fort Knox but even that is debatable because centralized storage only presents an easy target for bankers. At the end of the day the more centralized it is the bigger the target it becomes for those who want control of it. This is as much of a factual and historical statement as it is a technological design observation. Bitcoin and Bittorrent are designed to be decentralized because there isn't anyone who should be trusted (not the same as saying there isn't anyone who can be trusted). And to rely on trust when you don't have to is to introduce a point of failure into a system which doesn't have to have one. On centralized exchanges, if we don't have to rely on Burnside, on Ukyo, on anybody like that, then we reduce our level of risk in participating in the system should we choose to put our Bitcoins at stake. There is no reason why you should choose a trust based system when you can choose a trustless system to do the same thing. Human beings are the main weakness in any system. Look at the hip-hop music industry. The centralized powers have the attention, power, and efficiency to make money distributing entertainment in various forms. However, the abilities for independent artists to produce and create professional music, book their own tours, print their own merchandise, etc, are all there. A lot of people want to do away with that centralized power system as well. Not everyone supports the star system, centralized RIAA distributed system. That system is basically obsolete and only exists because of lawsuits, political lobbyists having dinner with politicians and the President to protect the jobs of middlemen who don't really make the art or go on tour. It should be obvious that I'm on the side of the independent artist and while there may be room for centralized systems, those systems should compete with decentralized systems to prove their worth. They should not rely on politics and legalese to try to protect their obsolete jobs. This feels like decentralization, yet now they are competing with the entire amateur industry. Those artists buy there hardware from known reputable (centralized) sources, they use centralized website services to get the word out, etc. Without centralized power and convenience none of it would be possible.
I agree that competition is a good thing. If anyone would like to make a centralized regulated exchange such as SecondMarket I'd definitely use it for the reason that it is regulated and it is in some ways considered more legitimate at this point in time. But the current exchanges dealing with Bitcoin are all illegitimate, unregulated, and if that is the case there is no moral argument that can be made for a person to choose to use Bitfunder over Mastercoin, Colored coin or whatever other technological solution that can come along and reduce the risk of nationalist lock-out policies, politics, and emotions of whoever is in the center of the centralized market. The attitude should be that we should not design any centralized markets in the first place as that is the main source of the problem with Paypal. Look at what happens with Paypal or with banks when they decide for political reasons to block certain transactions and not allow certain people to do certain things without explaining their actions. That is the same situation we see with BTCT and Bitfunder. It is part of the reason many people switched out of the big banks and into Bitcoin in the first place. Decentralization will always tend toward centralization of powers. Always. It's the only way to get anything done, and have any confidence it will get done sufficiently.
And I'm not disputing that disorder tends toward order. The difference is in scales. Decentralized systems can remain compartmentalized, can remain isolated, can trend toward centralization of information and services without trending toward centralization of control. What I mean is the Bitcoin blockchain is transparent and transparency means centralization of the transaction information such that anyone can access it. This is a good thing because we need that kind of centralization. We also need Bitcointalk to provide a central forum where everyone can access certain information, we need charts, we need indexes, we need information to be accessible from a single point but we do not need that information to originate from a single point. Distributed sources can combine data into a single point for convenience and I completely agree with you here. But I believe the sources should stay decentralized and I don't think that should become centralized because if all mining and all information comes from one source then according to the math of things you would have to trust that source absolutely. We don't want to trust any source absolutely in any system. I'm not saying a decentralized exchange method won't be created, I'm just saying it will simply produce new centralized forces around facilitating its existence, which will eventually lead us back to where we started. The pursuit is admirable, and maybe even one worth constantly attempting, but I simply do not believe it can compete with the natural forces of reality.
I don't think it's inevitable. For instance if you look at Bittorrent it is less centralized than Napster. But we also accept that Pirate Bay was a popular central website where people could find the torrents. Google is a central website where people can search for stuff. This isn't going to change. What can change is that power can be decentralized to such a degree that the risk landscape and opportunity landscape changes. In Bitcoin there will be some players who will have perhaps too much power and money. In a democratic decentralized landscape then we are free to use Litecoins instead as a way to hedge our bets against that. The point here is that the technology can produce an optimal environment, and that means an environment where the user benefits the most, where the system attempts to remain trustless, where it at least starts off decentralized, and always with the ability to shake it up again should centralization become too great. In the case of Bitcoin if any entity within Bitcoin starts to centralize things to the detriment of Bitcoin then the community should have the capability to decentralize itself or if it cannot then there is Litecoin and that is why so many altcoins exist. |
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Sign me up!
1hjscP2konFn4ddB4PDSvMAgMNaXuo2ak
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I was thinking about this some yesterday and I think the simplest way to have a distributed exchange without modifying the bitcoin protocol at all would be something similar to the following (see below). It would require a peer-to-peer network built to facilitate finding buyers and sellers for trading and distributing information regarding the securities but the transactions themselves would be conducted using the blockchain. This basic idea could be extended to facilitate bonds with buyback in addition to stocks although I haven't though through the details yet. The concept is similar to the idea of colored coins.
I'm willing to start building this, but I don't have the time to do it all alone, so if there are any talented programmers out there, please let me know if you are interested.
Here are the details:
* Each security would be represented by a single bitcoin address. The issuer of the security would hold the private key for this bitcoin address. Information regarding the security, including any news, announcements, or updates to the security would be signed by the issuer using the security's private key thus ensuring that the information is truly coming from the issuer.
* Shares in the security would be represented by the bitcoins belonging to the bitcoin address. Each satoshi would represent a single share. The security must be funded by a single transaction that represents the number of shares for that security. The total number of shares can never be increased or decreased. Any additional deposits made to the bitcoin address representing the security will be ignored by the Distributed Security Exchange (DSE) protocol. If the issuer wishes to increase the number of shares available he must create a new security.
* Shares are traded to investors by transacting bitcoins from this address to a investors bitcoin address. For simplicity sake, each investor should have a separate bitcoin address for each security he invests in. In that way, the value of the coins in his address with represent, in satoshis, the number of shares he holds for a given security. There is nothing to stop him or someone else from depositing more coins into an investors address but the DSE protocol will not count coins that come from an address that can not be traced back to the original security issuer's bitcoin address.
* Transactions of shares of a security would be performed using contracts. In the simplest case, the contract would involve the security seller transferring a number of satoshis equal to the number of shares he is selling to the buyer and the buyer transferring a the cost in bitcoin back to the seller. The contract would only be valid if both transactions have been signed appropriately by both the buyer and seller. A description of how contracts work in the bitcoin protocol is outside the scope of this document. In this way, both the buyer and seller can be sure that neither one can be cheated.
* The current price of a security can be determine by using a standalone app (or web service) that scans the blockchain and looks at the most recent price a security was traded for. It can also use this method to get average prices, daily highs and lows, and volumes in addition to other useful statistics on a security.
* Finding a buyer or seller is a little more difficulty. It is necessary to a use peer-to-peer network for buyers and sellers to connect with each other. A seller or buyer will broadcast how many shares they are looking to buy or sell and what price they are willing to buy or sell at. When a match is found, the trading software can automatically perform the transaction as described above and both parties will be notified of the transactions success. Transactions can occur outside of this peer-to-peer network just as easily so buyers and sellers can be located using other methods such as IRC, forums, and word of mouth, if desired.
Sounds a lot like mastercoin. Why not just develop mastercoin? http://www.mastercoin.org/https://bitcointalk.org/index.php?topic=265488.0You could simply use Ripple for this... Bitcoin is not really made to act as a marketplace from within, so you need an external network for trades anyways.
No you don't. Bitcoin had scripting capabilities built in from the start. It was always meant to do this. |
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Absolutely absurd. Between the actions of BTCT and BF I have lost just about everything I invested. BitFunder just a few weeks ago said they had no intent on closing and accepted the transfer of shares from BTCT - as soon as they get over there they pull this nonsense.
Thats what you get for trusting. |
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Mainly wondering if labcoin is relisted on another exchange. Is their still going to be record that I won 5000 shares. or have they already disappeared, dont need any sarcasm was a gamble to me all the way through, only lost $2000 alot less than most.
BTCT mails a complete list of email-addresses, public BTC-addresses and sharecounts to asset issuers twice per day. So the asset-issuer of LABCOIN (which afaik is Sam, not TheSwede) has the complete list. The question is whether it will be acted upon. Yeah, acted upon as in sold to phishers and scammers. Expect to find out how you won the lottery. |
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