Bitbay Announce First Decentralized Market Release (out of Beta)

[dzimbeck]

Well there is so many things I could say in response to this.

What you say is true. But consider the fact on E-bay people constantly get empty boxes and still are
forced to pay. Paypal payments get reversed and how can Ebay know who is telling the truth?

They GUESS thats how.

Now, we're talking!

But, I can tell you from sad experience that folks who set up marketplaces in competition with eBay have almost always struck out. There was even a team of three Power Sellers who banded together to do so; nothing came of their plan. eBay's network effect is too strong to crack, at least by a grassroots team.

Notice in USA they hold 25% of the worlds prison population, 85% in the prison for victimless crimes
(collecting rainwater, selling weed, not paying taxes, permit violations the list goes on)

So i think there is a major confusion here about what is legal and what is MORAL. Two totally separate
things. I can make the argument that jail is barbaric, disgusting and immoral....

I really should clarify. I wrote my earlier post from the perspective of a "hard-nosed realist" that was looking for viable use cases. To be honest, I didn't know you were more of the idealist type.

There are many use cases besides "Dark markets" where Halo is instantly valuable, maybe in the tune
of billions of dollars. Here are a few:

International Trade and Shipping (no more expensive insurance, deposits cover daily volume, no more
lost shippments, no more tricks)

Telcom (no more finding escrows, making complicated wire routes, finding banks, dealing between countries)

Outsourcing (no more procrastinating workers, lies about credentials, poor performance... all gone thanks to the fear of loss)

Cash for Coins (no more local bitcoins, countries that cant get BTC now CAN and with low fees P2P)

Barter (impovershed countries with no trust can use deposits at kiosks and trade commodities instead of cash)

International Business (countries with bad legal system, opposing laws, can find middle ground do trusted business)

So i think we should realize those industries need this, but they don't know how bad they need it.

There we go. Places where legal protections are iffy or non-existent: these are the target markets for Bitbay and/or Bithalo. But the trouble is, sectors like that naturally breed a low-trust mentality that inculcates suspicion of strangers. The low trust and wariness serves as a substitute for legal protection. That requires an evangelist to have "roots" in one of these communities, else it'll be enormously difficult to break through that suspicion barrier.

When the tree is rotting at the root, you don't clip the leaves you CURE THE ROOT. Even if the people
resist this change, it must happen even if not 100 years from now because things cannot stay broken forever.
If we don't use the best protocols then who will?

Well, a Bithalo-escrowed altcoin ICO would help...

Man i agree so much on all accounts. Im aware of the reality of the world. Too much. But when i have to be passionate about something money is not the prime motivator. So im an idealist at heart but am completely a realist in my objective knowledge.

I know that 3rd world wont adopt high tech and i know that 1st world will go to whatever is popular.

They dont call them sheeple for nothing! No offense to the sheeple of course, the media has an iron grip on their balls!! In a vice grip. Their minds are dominated by journalism... even fake science.

So can anyone compete with Ebay? No of course not. But things change something will take its place.

What i would like to see is a gateway for Ebay resellers so you can buy through Halo from a person willing to transact on their behalf on Ebay.

But even if that existed its true the masses wont want that. Eventually the masses will get tired of breathing and robots will do that for them too. Its not enough that the tv does your thinking for you. It must eat our food for us and breathe for us. Sad but true.

An ico would be nice but not unless im done with these projects.

[TPTB_need_war]

David directed me to the Help Desk at https://bithalo.org where I skimmed through the White paper and the section 2.10 of the Documentation.

I find it difficult to follow quickly due to the way it is not written with a concise explanation. And I am not really willing to expend the effort to attempt to reverse engineer the possibilities of what he attempting to describe. It appears he is proposing a protocol wherein the seller of for example BTC could escrow the BTC with the buyer such that the buyer risks double the BTC if the buyer doesn't pay the fiat or commodity to the seller. But I can't understand the protocol; for example he makes a statement in the white paper which I don't understand, "Perhaps Bob wishes to purchase bitcoins using cash from Alice".

I will await David to clarify.

Btw, ostensibly he is attempting a very steep learning curve at his age and the level of programming experience he had coming into this. So it is expected that at his age and level of experience, that his articulation would be somewhat difficult to follow, that is unless he is Eric S. Raymond who is a verbal and math genius.

Whats not concise? The protocol was explained from many angles with diagrams as well.

Most crucially, the software exists, works and can be used. Actions speak louder than words. The code speaks for itself.

I think the writepaper could use an update however since its been 2 years and now that its fully coded i can speak from experience in retrograderetrospective.

Note the correction above and also the incoherence of the sentence I had quoted. Now I understand what you meant to write was "Perhaps Bob wishes to pay cash to Alice for Alice's bitcoins" because "using cash from Alice" implies Bob is using Alice's money to buy Bitcoins from someone else which lead to think maybe you were designing a 3 party protocol. You may be similar to myself in having a high math IQ but a lower verbal IQ. Your SAT test would have indicated this to you if so.

Your white paper is written as if you are writing your thinking instead of writing for the reader who understands nothing that is already clear in your mind. As a writer you have to take yourself out of your own perspective, which is difficult to do when deep in engineering/conceptual thought. And the editorial review step of writing should catch and fix incoherent sentences that sow confusion for the reader who is trying to form a conceptual map.

The cash example refers to people who buy bitcoin. Traditionally Bitcoin is bought otc or through escrow. But otc is dangerous they can keep your cash and not send the bitcoins. And an escrow agent could steal funds. Furthermore, an escrow agent cannot truly calidate if deception took place or thr cash never arrived.

So bob wants to buy 100 usd of bitcoin from alice lets say.

So Bob deposits 100 usd in btc (to prevent himself from extorting from alice)
And Alice advances 100 usd in btc for the purchase plus 100 usd deposit

Now Alice is out 200 Bob is out 100 locked into an escrow that each of them has 50% control. They agreed that the time limit is 2 weeks. If this time limit expires they both destroy the escrow resulting in loss for both parties. Since that cant be prevented they must work together.

Now Bob sends 100 in cash via western union. Note this is the first time in history WU can be used trustless without an escrow agent or laws tacitly as a deterrent.

Once Alice gets the 100 she is still -100 because of her deposit and advanced payment. Bob is -200 because his deposit and cash advance.

Now they release escrow since they agree the deal is complete. Bob gets his deposit back and 100 usd in btc and Alice gets her deposit back so now she has 100 usd in cash in exchange for her btc. The sale of btcoins is complete. Both parties are happy and nobody needed a government or third party looming over the deal. And more importantly, at no point could Bob or Alice steal from this deal or try to lie to the other because if they had they both would have lost.

Lke ive said before as well deposits dont always have to be equal to the value. They can be 10% the value since any deposit in this deal would be a net loss for a thief. However make the deposits high is best when dealing with an untrusted party. You deposit thus reflects your level of trust.

This is a much superior, concise, and comprehensible explanation.

And the deposit can be increased relative to the size of what is being traded, so that the intermediate step doesn't alter the balance (-of-risk) much, e.g. Bob deposits $1000 and Alice $1100, then on payment Bob has $1100 at risk and Alice $1000.

This indeed is the only way I can see to solve the sort of problem you explained:

Well there is so many things I could say in response to this.

What you say is true. But consider the fact on E-bay people constantly get empty boxes and still are
forced to pay. Paypal payments get reversed and how can Ebay know who is telling the truth?

They GUESS thats how.

However, I still don't understand how this protocol helps you set up eBay auctions decentralized? (perhaps I could figure it out, but easier to let you tell us)

P.S. I am starting to take an interest in you. He or she who solves a serious problem for society with a viable protocol, especially at your age, is bumped up several notches on my radar. I am very curious about your programming talent.

[TPTB_need_war]

David I know how to tap the huge market for your technology. Perhaps you should consider to partner with someone with a proven reputation in both coding and marketing. Your objective realistic idealism is very much similar to mine, but I am just older and perhaps bit more seasoned and pragmatic (because I don't have the years more to waste on the experimentation I already did):

https://bitcointalk.org/index.php?topic=1417580.msg14368963#msg14368963
https://www.linkedin.com/in/shelby-moore-iii-b31488b0
https://bitcointalk.org/index.php?topic=1219023.msg14358322#msg14358322

Your passion is a very important attribute necessary for success. This has to be balanced though.

[TPTB_need_war]

Unfortunately there is a flaw in David's protocol concept.

The deliverable may be an empty box, but that still doesn't stop the buyer from releasing the BTC to the seller, because at least the buyer gets back $100 of his $200 deposit in that example case.

I remember now I had considered this sort of protocol in the past and dismissed it as fundamentally flawed.

Both can increase the size of the deposit, so that the amount Bob and Alice lose if Alice sends an empty box is much greater than what Bob loses by not releasing the BTC to the seller. So in that sense the protocol can function, but at a very high risk[1] relative to small transaction values.

Btw, the other overriding issue is I think we are moving away from tangible goods, towards digital delivery in exchange for micropayments, so this protocol may be less useful. Who cares if they lose a micropayment. They will know not to deal with that seller again, i.e. decentralized seller reputation held independently by each customer. Disrupting the tangible goods sector of the economy is a non-starter, as Nxtblg has pointed out upthread. Your protocol is pushing for larger deposits and centralized reputation[1] which is the antithesis of decentralization. You are trying to fix a sector of the economy that is dying as we move into the Knowledge/Information/Digital Age.

[1] What if the seller or buyer just flakes out for what ever reason. Seems we are back to long-term reputation of reliability, but is there is no way to measure this that is objective? I.e. it can't be proven which party failed the prior instances of the protocol.

[whale_shark]

That's the buyers fault then I would have thought. You don't pull the tags of a shirt without trying it on do you? If you do that's your own fault

So you wouldn't release the funds without checking you got what you paid for

Glad my first investment in altcoins is Bitbay. I think I have found a rough Diamond here!

[dzimbeck]

TPTB_need_war thank you and I appreciate your patience as well. I realize that this is
a very abstract problem and to market it to society is extremely challenging since it
totally changes the paradigm of agreement.

By the way, I want to agree with you. The whitepaper really needs a rewrite and so does
the documentation. The problem is, I'm working alone so to do that and code is hard
as hell.

Imagine that I have to take off my "nerd hat" and put on my "marketing hat"

Explaining things in a simple way that isn't confusing to a consumer is extremely challenging.

To be honest, I'm not skilled enough at that you are right.

The reason is, I love talking to people the way I think and without a filter. (which has
gotten me into trouble when I accidentally type things I don't truly mean... on impulse)


It is something I can do when spending the time on it though. After all Halo is a good brand,
you can put a Halo on a coin somehow making it "honor amongst theives". The symbol is a branding
strategy to be able to co-brand with popular projects that want to work with Halo (like Ethalo)

Despite all that, I can't be a one man army. Having slack has been helpful. Occasionally
volunteers come in and help (like the miraculous UI made by Sunwah in Blackcoin)
(Or Bitcoin42s Alec Hahn who magically appeared and made my sites for free)
so I'm grateful for the occasional assistance. Very much so.

I'm happy to talk about collaborative efforts. Although I forewarn you that I'm dead set on
honoring my word here at Bitbay, Blackcoin etc no matter how many jobs have to be passed up.

The thing I think will set you at ease is that this is not vaporware. We can do a contract
in Bitbay, you can see for yourself it working. The source code is auditable... although if you
want to build from source I change variable names. This is how I was able to prevent cloning and
people who wanted to make dark markets out of this.

Since you asked, I can explain why there is not a flaw with the empty box and i will explain auctions.
But I should add, I limit my time every day on my browser with a plugin. This throttles my internet
and doesn't let me spend more than 10 minutes a day on social media including BCT and I honestly
need to focus on work. I will add you on LinkedIn though we can talk through email etc.

Okay so the empty box:
Bob wants to buy a guitar, he deposits 100 usd deposit 100 usd advanced payment.
Alice wants to sell a guitar, she deposits 100 usd (to prevent empty box and extortion)

When she sends an empty box, Bob will obviously be extremely angry. He will request a refund
and if Alice refuses any sane person would destroy the escrow or cancel the contract (both
will get deposits back)

In no scenario could I imagine Bob giving Alice 100 dollars to save himself 100 dollars. If Bob
does that he honestly deserves to lose that money. Bob is too weak, a complete pussy rewarding
Alice for lying. This cannot be good behavior. In fact it is people like Bob who are why politics
tramples people with propaganda. This whole "benefit of the doubt" attitude where people reward theives
out of kindness or weakness or "turning a blind eye" or "acquiescing" is exactly why society is
upside down in the first place.

What would happen is, Alice sends and empty Bob and if she refuses to work with Bob he will
certainly let the escrow expire. He will lose 200, she will lose 100. (you could have made
her put up a little more)

There IS a reputation system in place that checks the result of transactions and puts it in
a database. So it already reads to blockchain to make sure no contracts blow up.

The "extortion attack" doesn't work so well not only because of the reputation system but because
in order for Alice to WANT to extort it needs to be profitable long term and I guarantee you it
is not. Many more people will blow up Alices money out of extreme anger for her transgressions.

The whole point here is really mathematical probability:
What is more likely? A risky extortion attack that you need to pull off MORE than 50% of the time
to screw people out of money?

OR simply stealing peoples shit on Ebay with ZERO risk of getting caught because nobody can prove
you didn't put the guitar in the box, not even USPTO (put rocks in it, it will weight the same).

In the above case of theft 100% of the time it works. Mt Gox is a good example. I assure you
if Mark Karpeles had to put up deposits to accept wire transactions for BTC then he would have
never in his right mind stolen the funds. (although he claims he was set up but if thats true
why not return the WIRES since those weren't in BTC)

Also the laziness problem or the missing counterparty problem. The good news is, you can give
the contracts file to your wife or friend and they can manage them for you since all accounts are
multisig and there is no way to steal an escrow or an account with 1/2 a key.

Also, there is a time limit the is arranged before the deal. So if you fear that issue make the expiry
a month or two months. Its extremely rare that I communicate with someone who is never around for
two months. This is also why you have the option to supply additional contact info. (spouses and
friends might be a good idea to have for backup options in case you are hospitalized)

I think the above scenario would be more of a learning curve than an inherent flaw ^

By the way, "people going missing" or "being lazy" is a much much much much more serious FLAW in traditional
outsourcing. Becuase I've dealt with it. Dont get me started on how !@$%ed up freelancers and outsourcers
are!!! They procrastinate, they lie about credentials, they take WEEKS to respond.
Using ODESK or FREELANCER for example is a nightmare! They waste weeks, months of your time! Time I would
have gladly paid money to GET BACK. Nothing is more valuable than time, and people who waste it deserve
a default.

This is why I have a template dedicated to EMPLOYMENT because if there was a way to punish people who
waste my time, I would. Also this has been successfully tested with a quick refactor job in BlackHalo
and guess what? The guy who would normally procrastinate on me was forced to send me weekly updates.
Escrow extensions can be automated in that template. We did it manually. When i gave him too many
extensions (because he got lazy after 3 weeks) then I would have been happy to default. The contract
ended and saved me so much time and pain from waiting another X months to hear a response from
yet another lazy contractor!!

As for auctions, its really quite simple. There is TWO auction styles being worked on in Bitbay/Halo


The first is normal auctions.

Bob lists the product and waits for bids. Those bids are signed of course (anything that gets to the market
is signed) and Bob will then sign a message back with the highest bid.

Its in Bobs best interest to post accurate bids. If both parties sign their bid, everyone can check
that the values indeed match. So faking this would be pointless and difficult to do.

Bob accepts the highest bidder, because there is more money in it for him.

IF we see people trolling auctions, we can require them to BURN funds to Bid. For the first version
of auctions, I'm not going to force a burn... simply because its scope creep and I need to finish all
my templates.

So its really simple.

The next method is REVERSE auctions.

Basically a person wants to BUY a product (Bob wants a guitar)... but Bob wants the BEST PRICE!
So, he can again burn funds securing the auction and then let bids come in.

He will want to take the lowest bidder but a higher bidder might offer a nicer guitar! I'm sort of debating
how to sort these offers in my user interface. Do I let Bob take lowest bids that seem favorable?
Or do force Bob to take the lowest bid? No point to the reverse auction if Bob is asked to buy a broken
guitar. So best to probably list all bids as counter-offers. The whole point of the bidding is to simply
alert the MARKET of the current prices accurately.

[Pietpiraat]

What is next for BitBay to be done, i can't seem to find it anywhere.
I have readed something that they addes a new marketing team and planning on being added to Polo ?

[TPTB_need_war]

What would happen is, Alice sends and empty Bob and if she refuses to work with Bob he will
certainly let the escrow expire. He will lose 200, she will lose 100. (you could have made
her put up a little more)

There IS a reputation system in place that checks the result of transactions and puts it in
a database. So it already reads to blockchain to make sure no contracts blow up.

The "extortion attack" doesn't work so well not only because of the reputation system but because
in order for Alice to WANT to extort it needs to be profitable long term and I guarantee you it
is not. Many more people will blow up Alices money out of extreme anger for her transgressions.

The whole point here is really mathematical probability:
What is more likely? A risky extortion attack that you need to pull off MORE than 50% of the time
to screw people out of money?

OR simply stealing peoples shit on Ebay with ZERO risk of getting caught because nobody can prove
you didn't put the guitar in the box, not even USPTO (put rocks in it, it will weight the same).

In the above case of theft 100% of the time it works.

Afaik, eBay has a reputation system and anyone not using it to check the reputation of both the seller and those who voted on the seller's reputation, deserves to be defrauded.

People that use eBay understand very well that if they want 100% protection, go buy from Amazon instead. If they buy from eBay, they use human judgements which are actually pretty astute for those who bother to hone that useful life skill.

What can happen with your system is that eBay spends part of the marketing budget to do the empty box scam on 1% of your transactions. What is likely to happen is people will find it is more risky than eBay, because at least on eBay they can make their case to eBay and then eBay has to weigh the facts and make a judgement. eBay will over time be able to statistically determine which users are the liars by doing correlation analysis.

So yeah some people might get pissed off, but that will also make them pissed off at your system. They are much more likely to then choose Amazon next time or vetting the person somehow.

It is good that you have a fighting spirit, but you need to understand that you don't make successful (software) businesses based on introducing strife for the users. Humans prefer things that just work with the least tsuris.

There may be a use case for Bitbay which supercedes what I wrote above. I encourage you to complete it and fulfill your obligations. I am not trashing it. I am just speaking frankly about the potential to replace eBay.

Using ODESK or FREELANCER for example is a nightmare!

I found out about that too. Cheap and Eastern European or Indian programmers don't work out well.

Bob lists the product and waits for bids. Those bids are signed of course (anything that gets to the market
is signed) and Bob will then sign a message back with the highest bid.

Its in Bobs best interest to post accurate bids. If both parties sign their bid, everyone can check
that the values indeed match. So faking this would be pointless and difficult to do.

Bob accepts the highest bidder, because there is more money in it for him.

IF we see people trolling auctions, we can require them to BURN funds to Bid. For the first version
of auctions, I'm not going to force a burn... simply because its scope creep and I need to finish all
my templates.

So its really simple.

But I am asking about how you can be sure the bidders have committed the funds for their bid? I am assuming you have some multi-party commitment to a deposit? But I just don't see how that can work.

[Munti]

@Tptb_need_war
I pretty much agree with your analysis on who would find our market useful. There is however one thing you forgot.
Do you remember dotcom? How everyone was trying to make the most important portal to the Internet? No one was at that time able to predict the impact of social media or the income from big data.
I believe that's where we are with markets today. We are all competing to be the next eBay, but most likely that will never happen. If we come with something that can actually threaten eBay, they will adopt it. We may be able to carve out some niches for ourselves,and that may be lucrative enough.  But the big potential imo is in all the possibilities we have not thought of yet. Just like no one imagined Facebook or Netflix in the dotcom days. And it is Based on this that I made BitBay my main investment in crypto. It is the first and,for now, only truly decentralized market project -meaning no middle men, it is scalable, and it will get pegging. The combination of all this should make BitBay the obvious choice for someone that wants to use the tech for new purposes.

[dzimbeck]

TPTB, you cant force a commitment of funds unless you overengineer it with deposits for each bid.

So if you read my response notice where I said "Proof of burn"

In other words if we find people backing out of bids, we can force them to burn funds to secure it.

In other words, the auctioner and the auctionee can both do burns and we can even do them based on the size of the contract.

[whale_shark]

Still learning all this but with Azure people can develop Bitbay and create new features and add-ons which is only a good thing isnt it? What are the negatives to Azure and is Bitbay planning on joining Azure to let others do this?

[TPTB_need_war]

Assuming the technological issues are correct, one potential use case for Bitpay are the types things that eBay doesn't allow to be sold, or the repudiable payment options that eBay requires sellers to use, are not compatible with the non-repudiable item being sold, e.g. selling gold and silver at very low spreads where the cost of payment fraud can't be absorbed into the profit in the spread.

Of course Bitpay will probably end up another Silk Road and will end up being attacked. But it might be a profitable wild ride for a while.

David as for the technology, why not just use a block chain and store commitments on it. Okay I understand there is a scaling versus decentralization issue. I also understand I have solved it.

[dzimbeck]

Assuming the technological issues are correct, one potential use case for Bitpay are the types things that eBay doesn't allow to be sold, or the repudiable payment options that eBay requires sellers to use, are not compatible with the non-repudiable item being sold, e.g. selling gold and silver at very low spreads where the cost of payment fraud can't be absorbed into the profit in the spread.

Of course Bitpay will probably end up another Silk Road and will end up being attacked. But it might be a profitable wild ride for a while.

David as for the technology, why not just use a block chain and store commitments on it. Okay I understand there is a scaling versus decentralization issue. I also understand I have solved it.

I have a moderation key that i can give out to prevent silk road type offers. However if we dont know about the market we cant moderate it.

There is also a barter template in Bitbay especially for gold for silver, corn for wheat, farm coops etc.

So the comparison to ebay is a bit narrow. This is more like Ebay, Reverse auctions, Freelancer, Craigslist, Localbitcoins, Smart Contracts, and Barter all rolled into one.

There are more reasons to not store cotracts on the blockchain besides bloat. Mostly they are peer to peer. Why store them on the blockchain? Using burn would require 100s if not 1000 outputs. Its tremendous bloat and a waste of fees.

Bloat can be reduced with a lightning network but for markets they are done in Bitmessage. And then two communication protocol options are used. Imap with pgp and Bitmessage with pgp.

You should research Bitmessage to see their protocol.

The double deposit of course goes on the blockchain but the nitty gritty non financial details doesnt belong on the blockchain.

[TPTB_need_war]

You should research Bitmessage to see their protocol.

I was in their forum discussing how to fix it when it was overloaded with spam. It wasn't only you who was helping them fix it.

[cryptohunter]

https://bitcointalk.org/index.php?topic=1423568.0

someone else is called bitbay too? or is this part of the same project?

[Munti]

https://bitcointalk.org/index.php?topic=1423568.0

someone else is called bitbay too? or is this part of the same project?

That's a polish exchange. Has nothing to do with the coin BitBay

[pugman]

I'm so glad I did some research and found Bitbay a few months back!
I think it's going to be a big mover in 2016

[dzimbeck]

You should research Bitmessage to see their protocol.

I was in their forum discussing how to fix it when it was overloaded with spam. It wasn't only you who was helping them fix it.

Yes my mistake there were several others. I sent Aetheros some pms, posted on their forums and reddit. They knew about the issue. Basically there was a node mutating messages because of how they left parts of it volatile. There was several other bugs. Those got fixed. There is a few more still but Bitmessage is going in the right direction

[TPTB_need_war]

You should research Bitmessage to see their protocol.

I was in their forum discussing how to fix it when it was overloaded with spam. It wasn't only you who was helping them fix it.

Yes my mistake there were several others. I sent Aetheros some pms, posted on their forums and reddit. They knew about the issue. Basically there was a node mutating messages because of how they left parts of it volatile. There was several other bugs. Those got fixed. There is a few more still but Bitmessage is going in the right direction

Thank you for helping to fix Bitmessage. I was able to communicate again apparently due to your efforts.

Sorry I don't have free time right now to dig into all the design specifics of Bitbay auctions. I still have some questions and doubts, but I simply lack the free time.

I believe you are sincere and hopefully you are also talented.

[Peachy]

Seems like the method is the same (or quite similar) to the NashX proposal:

http://nashx.com/About