First, what this is NOT about: A decentralized exchange to trade between fiat and cryptocurrencies.
Sure, it would be really nice. But it might just not be possible. There are ways to make it less centralized. But that's just not what my proposal is about.
What it is about: Trading different altcoins without having to trust your trade partner (e.g. Exchanging 1 BTC for 100 PPC from someone you don't even know on the internet without going through a trusted third party)
Next, there are NO real alternative solutions out there that I know of. There are a couple who claim to be working on it, and I don't really believe any of them will be successful. This is just too complex of a problem to just shoehorn into a cryptocurrencies that's already trying to bring 4-5 new paradigm shifts to the table at the same time.
So, others who are talking about this sort of thing:
https://bitcointalk.org/index.php?topic=172705.0 (Fiat P2P platform to locate trusted centralized brokers/institutions)
https://bitcointalk.org/index.php?topic=26063.0 ("Dark Exchange". Fiat-Crypto P2P network to locate trading partners. Requires trust of random trading partners. Centralized exchanges are a better alternative IMO)
http://opentransactions.org/ (Arbitrary asset exchange network. Not sure if P2P, definitely requires trust among trading partners)
https://bitcointalk.org/index.php?topic=174464.40 (Some people who appear to be trying to solve the Fiat-Crypto P2P trustless problem.)
https://bitcointalk.org/index.php?topic=174302 (Relevant conversation, mostly about Fiat-Crypto P2P exchange, no solution offered)
https://bitcointalk.org/index.php?topic=173187 (Semi decentralized Fiat-Crypto exchange)
https://bitcointalk.org/index.php?topic=62879 (Interesting proposal for a Fiat-Crypto P2P network, but uses a magic "Trader Bot", so it's just as centralized as anything else).
About Colored Coins:
I don't care how much lipstick you put on a pig, or what color you paint your bitcoin. Neither is going to turn into a house.
I'm not saying that Colored Coins aren't an interesting concept. But I am saying that they require trust that whoever colored the coin will really back up that purple coin with an actual house. That prevents Colored Coins from being a viable solution.
About bitcoin's programability:
It's quite nice, and it might be of some use. But it's not good enough because bitcoin's programming language doesn't have any tools to observe what happens outside of itself.
About NXT:
There seem to be vague second-hand claims that they're going to do something like this. But there's nothing concrete and there's no indication that they even have the first clue on making it happen.
About eMunie:
They seem much more capable and realistic about the problem. But they don't seem to have the design of a solution yet, so they're still pretty far off.
My solution:
https://bitcointalk.org/index.php?topic=381623.0It requires the creation of a new type of coin, which I have so far called TradeCoins, that natively support escrow services that resolve automatically based on what can be observed in the blockchain of other cryptocurrencies.
There are a few missing details, especially around extensibility. But these are very solvable.
I hope this establishes that I do have a good plan to solve an important problem that no one else has solved yet.
The next few steps for me are to find out what kind of market interest there is for this solution and whether I can make it worth my while to build it and whether I can get help building it.
So, on making a profit, here's my plan:
First: full transparency. Too many of the innovative coins are there are extremely opaque about who is profiting from those coins, by how much and what they contributed to the project to deserve them.
I plan to finance this project by taking a percentage cut of mining revenue, fees and/or commission.
I don't yet know what that fee would look like. For fees and/or commission I'd be tempted to take 0-20%. A tax and fees and commissions can be very damaging to the network, so I'd like to keep it to a minimum.
For fees on mining revenue I'd go anywhere between 5 and 90%. Frankly, I don't really see the point of letting a fortune go to waste on electricity, when it can be used to help development of the coin instead.
What I do not want to do is any kind of significant pre-mine or insta-mine. A long term revenue stream really helps align developer interests with the community's interests.
Next, I need a team to build this.
Alone, it will probably take me up to 6 months just to build the TradeCoin itself (aka mining clients and protocol).
But on top of that, we'll need a client to make transfers. We'll need a trading client to take part of the exchange. And we'll need to build the exchange itself.
It would also extremely help adoption if we can "port" the clients to all popular platforms: iPhone/Android/Windows Phone/Mac/Linux/Windows PC
I think adding more developers to the project will strengthen our offering by a ton (and hence profits). So this project should be able to handle up to 4 developers.
Also, note that building the exchange network is a massive undertaking all of on its own. We may want to build a centralized exchange API that the clients connect to instead, and then build the decentralized network at a later date. Or perhaps even partner with another group that has a decentralized exchange solution but doesn't have the underlying untrusted trade system powered by TradeCoins.
So, if you're a skilled developer and you're interested in potentially making much profit (in TradeCoins) for doing really good work, then please get in contact with me.
Finally, I need customers:
If you're a trader or an alt coin enthusiast. Please tell me what you think of this, whether you would be interested in using the decentralized trading market and what you think of TradeCoin's potential.
