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61  Economy / Trading Discussion / Bootstrapping a local economy on: February 03, 2011, 04:37:20 PM
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The limited resource of proselytising
=====================================

Presently, the bitcoin economy would appear to be mainly those interested in making margin profits in trading, with attendant financial services springing up to service those that deal mainly in currency trading - escrow, etc.

Without _local_ currency markets, bitcoin would appear to be a trader's game - more or less (to a layman) an online game that they may not understand all the rules of.  Why bother when they could invest their money in a "real" market that is so widely trusted the risk is seen as nonexistant (legitimate belief or not).

Take the time to educate that person on hidden taxations such as inflation, etc, and there is a possibility that they will begin to consider putting a portion of their savings into bitcoin - as just another way to spread risk in their portfolio.


Premise
=======

I have a small pool of investors that would like to bootstrap our local economy in bitcoins.

We have a reasonable amount of initial capital to inject into the system (perhaps a couple K USD between us) and accept that we may take a total loss as these bitcoins flee the local geographic area.

Although we have a wide range of services / goods that we can offer to each other - necessarily we will need to do (at least at first) a majority of our trades with the local community.  Obviously, we need to take our limited resources - our time and energy spent educating others about Bitcoin - and establish beachheads in the community that promote the greatest uptake.


Request For Comment
===================

What (in your opinion) are the key places to establish adoption of Bitcoin outside of our initial pool?

* Businesses dealing primarily in cash?
* College students?
* Persons that might like to have nonreputable "cash" that can't be stolen by a malefactor at point-of-trade?
* Employers of below-minimum-wage or undocumented workers?


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62  Economy / Marketplace / Re: Proxy purchasing / RL mixmaster network on: February 02, 2011, 07:19:47 PM
Sure, trust can be built via ratings, which may be forged/false

I'd missed the part about ratings being forged - I was planning on the nodes using GPG's web of trust.  The problem of forged trust can be solved, I believe.  Probably by someone smarter than I.  Wink
63  Economy / Marketplace / Re: Proxy purchasing / RL mixmaster network on: February 02, 2011, 07:17:04 PM
how do you propose to solve the 'last mile' problem?

Sure, trust can be built via ratings, which may be forged/false, and the 'first delivery' for someone new to the network carries a ton of risk if it's something like Silk Road material.

Dead Drop locations can be watched and whoever picks up the material insta-nabbed.

Okay, let me rephrase and number those, to see if I can address them properly.

A1) How do we build trust within the network, so that endpoints can send [expensive/extralegal/etc] material, while maintaining "acceptable" risk?

That was why I was limiting my initial bootstrapping effort here to items on Amazon within a certain price range -- that nails down concretely that at first, I will not accept extralegal risk, and I will not accept risk over a certain dollar amount.

However you'll also note that I am amenable to dead-dropping (without restrictions) within my area of operations, for payment in BTC.  This is a risk I am also comfortable with.

B2) How do we lower risk of law enforcement infiltrating and corrupting / capturing nodes?

I am assuming that is who would be doing the nabbing - since the receipt of postage would be to a bitcoin wallet somewhere and not on the courier, and the nabber would already possess the couriered item.

This I was leaving up to the network to figure out - nodes on the net could figure out their own methods for making dead drops more secure, and I would hope would share them.

The problem, I think, devolves into two groups:
The sender is more at risk.
The recipient is more at risk.

I can eliminate sender risk by going out into the woods, burying the goods, and then telling the recipient where it's located.

Recipient risk is harder to mitigate, though I would imagine you have plausible deniability (to an extent) in that you can not be proven to be an exit node.

The strategem I'd come up with was negotiation of the time as close as possible to the actual trade, in a public place.  Perhaps an airport, hospital, shopping mall, etc - where someone carrying a bag large enough to contain the parcel would not raise suspicion.

Flashmobbing several pickups / dropoffs in a short period of time would be another.  This is what I was what I think a central DB would help out with - if I can organize 10 handoffs in one shopping mall inside of an hour, it would seem to me I can seriously spread the risk of being nabbed.

A nabbed courier would also indicate to that area of operations that there was a corrupt node, and they could begin auditing their peers.  If everyone is using GPG, there will be a 'head node' that knew the time/place of the handoff that will be immediately suspect.
64  Economy / Marketplace / Re: Proxy purchasing / RL mixmaster network on: February 02, 2011, 06:20:55 PM
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Rationale
=========

One of the problems of anonymity, as I see it, is the problem of receipt of goods, anonymously.

Silk road (http://tydgccykixpbu6uz.onion/), for instance, provides a market, but leaves the "last mile" up to the individual customer.

It would seem to me there is room there to provide a service - I'm attempting to do market research before I invest in the creation of a meeting place (tor website / DB) for people also interested in solving this problem / distributing the risk.

No one has commented / followed up on this in 24hr, so I'll presume either the demand for this service is not high, or I have not provided enough incentive.


Incentive
=========

One criticism that's come up is that eating the shipping is not enough of an enticement - people can get free shipping handily.  Agreed. 
The service I'm offering is a layer of deniability, not free shipping.

So, how about this - offering to pay a "postage" for someone to recieve goods and dead drop them for me.  Are there people interested in negotiating in that direction?

Alternately, we can negotiate a trade ratio for BTC that is more enticing.

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65  Economy / Trading Discussion / Re: A Heroin Store on: February 02, 2011, 03:31:05 PM
Okay, so to get this off the ground I need to undercut the ratio at MtGox...  I get free shipping but yes, that's an obvious demerit.  Duh.

Am I looking at this from the wrong end of the market?  Should I be soliciting dead drops, rather than offering to be one?  Would that have more takers?
66  Economy / Trading Discussion / Re: A Heroin Store on: February 01, 2011, 04:33:04 PM
You route your goods - whatever they are (how about firearms - since it seems like some of you are so freaked out about drugs - HAH) through a chain of trusted mules.

What if someone steals the goods?  Unlike on Tor, one can't "encrypt" the goods.


That is an excellent point.  I have a few theories on how to deal with trying to game the system.

A1) Individuals get tied to a anonymous reputation - perhaps leveraging a GPG trust web.
B2) Anonymous auditing - costs bitcoin to perform.
C3) Starting small - the network can start initially as a remixer for postcards, legal goods of small value, etc.  As trust networks develop, those nodes can start charging postage.
67  Economy / Trading Discussion / Re: A Heroin Store on: February 01, 2011, 03:51:37 PM

I moved discussion of my physical-layer mixmaster network to a new topic http://bitcointalk.org/index.php?topic=3088.0.

I am willing to put my USD where my mouth is to kick it off, and eat postage for awhile.
68  Economy / Marketplace / Proxy purchasing / RL mixmaster network on: February 01, 2011, 03:48:42 PM
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Proposal
========

I will buy anything on Amazon.com (up to $50 at first) and reship it to you free of shipping charges, in exchange for the current (as of the request) MtGox bitcoin::dollar trade ratio.

I am amenable to using further proxies, cutouts, escrow, etc.  The idea is to set up a web of trust, and to exchange some of my capital for bitcoin.

If you are interested in doing local dead-dropping with me, my area of operations is US ZIP 97502 - I will gladly move packages from one GPS location to another within certain time constraints for bitcoin.


Goal
====

I wish to set up a network of trusted agents in various areas of operations for a physical mixmaster network.  The eventual plan is to charge postage in bitcoins, use dead-drops (geohashing?), and GPG to build a reputation between agents for honest dealings.  I would think a meta-market of auditors could also be set up at some point by sending false packets through the network.



I welcome (hopefully constructive) criticism of these goals, as well as expansion on them.



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69  Economy / Marketplace / Re: List of honest traders. on: January 31, 2011, 10:03:51 PM
Can we leverage the "web of trust" for this?

http://en.wikipedia.org/wiki/Web_of_trust
70  Economy / Trading Discussion / Re: A Heroin Store on: January 31, 2011, 05:40:29 PM
Anybody investigate the idea of reputation and middlemen/mules?

I could see a Tor hosted site (or a distributed trust ring, like bitcoin itself) that essentially links a bitcoin address, a PGP key, and a list of transactions completed/failed...

You route your goods - whatever they are (how about firearms - since it seems like some of you are so freaked out about drugs - HAH) through a chain of trusted mules.

The transfers start small, maybe shipping test packages with micropayments for each step in the route.

Like onion routing for the real world - exit nodes can go last mile from the postal service to a GPS dead drop.

I'd be interested in forking this topic to get away from drugs, guns, etc - whatever the contraband is.  The point is there is a "cost" with flaunting the law, and with something assuring anonymity (if done right) there is a way to arbitrage between the legal and extralegal networks.
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