Abstract
A purely peer-to-peer version of financial institutions would allow financial
services to be provided directly from one party to another without. This coupled
with Satoshi's Bitcoin enhances one's freedom in the world and allows for far
more than has been possible up to now. The network is intended to decentralize
the following, but not limited to, services: banks, insurance, stock exchanges,
and brokerage. This whole system revolves around the concept of "I owe you".
Grounds
It is based on a Web-of-Trust and to fight some of the disadvantages I purpose
the data to be divided in a more manageable form. To ensure data availability
and manageability I purpose the data to be divided and distributed using the
available Distributed hash Table technology already being used in distributed
protocols such as BitTorrent.
Protocol
-3 Levels of trust: "I might trust you, though I will manually check your coms", "I trust you", and "I trust you and those you trust". Additionally if a connection is not trusted it is plainly ignored.
-Each node can choose his preferred algorithm and bitlength. The key and related info will be stored in a Distributed Hash Table and a similar address convention to Bitcoin will be used.(RFC: This is the chance to add more goodies)
-A credit line would need to be established. Trust from one to another does not infer the trust from another to one.
-Payer is the only one that must sign a contract in order to owe "something" to "somebody".
-All communications from a non-trusted peer are simply ignored.
-If a peer, ex a payment gateway*, needs a tremendous amount of bandwidth it should be requested. *A payment gateway you trust would be able to receive a payment ending up he owing you "x" amount that you can use in your favour by sending payments trough him to a peer in another location. This allows you to send payments even if not globally trusted.
-Contracts, by instance IOUs, can be created by peers. This contracts are stored in an individual DHT and have the option to leave fields for payers and payees. An example is below:
{
"hash":"12x(whatever)",
"legal":"Legalize Here:\n Simple IOU \n I , $payer$, agree to pay the amount of $amount$ of $type$ to $payee$",
"layman":"I owe $amount$ $type$ to $payee$"
}
-Intermediaries would route the payment between unkown and directly untrusted parties. Though, their consent is not needed as their total credit will be unaffected.
-All contracts and trust between peers would be public knowledge. Contracts signed between parties would be stores in a distributed hash table with a time-stamp.(Anonymity issue? Workarounds?)
This is just a proposal and a request for comments. If I haven't considered an issue please point it out. Yes, this is based on Ripple. It is slightly different in the sense that it takes care of more than credit and it is decentralized completely. This would help with the recent MtGox attacks and ensure the financial integrity of Bitcoin. I suggest this software to be called OurFinances, however suggestions are appreciated.