It's time to fund a distributed open exchange protocol and here is how we can

[Luckybit]

1. We should host a protocol design contest similar to the X prize where first we agree on, define the problems which need to be solved by the protocol and then vote on the best solutions via a poll. The winner after 7 days should receive the prize and should be the team or lead developer of the project. The goal here should be to try to find the next Satoshi.

2. Once the contest is complete we start up a Bitcoin investment fund facilitated through Kickstarter or something. We pledge X amount of Bitcoin, this initial funding can pay for the development of the project. When the project is complete the transaction fees should be used to give the initial investors a profit of up to double what they put in. This would provide incentive to invest in the idea with the promise that anyone who invests will get more money out of it than they put in, but limit it to x2 so that it's not based around greed.

I think this is the best method for organizing the community around a good idea that we all vote on and then pledge some Bitcoin to. I don't have a lot of Bitcoin but if I pledge 0.5 Bitcoin and get 1BTC or 1.5BTC in return then I would be happy with my ROI. If everyone who invests gets similar then that would be fine as well, and if developers all get paid to do their job that is fine as well provided that the money isn't given to them all at once.

This would mean the Bitcoin would have to be in some sort of escrow and be released slowly on a weekly or monthly basis to the development team. Anyone like this idea and want to set it up? I really believe this is too important not to fund real development as an amateur effort probably isn't good enough for something this important. At the same time I think we have enough Bitcoin that we could probably fund it ourselves and we have every natural incentive to want to.

[1714049226]

1714049226

[1714049226]

1714049226

[1714049226]

1714049226

[1714049226]

1714049226

[mmeijeri]

Already exists. It's called Ripple.

[Luckybit]

Already exists. It's called Ripple.

Everyone keeps hyping Ripple but Ripple is centralized and where is the code? Where is the whitepaper? Why should we go from depending on mtGox to depending on Ripple?

[Tek-Ti]

This exists. It's called cash

[Luckybit]

What is the point of having Bitcoin if we can't use it to protect Bitcoin?

[mmeijeri]

Everyone keeps hyping Ripple but Ripple is centralized and where is the code? Where is the whitepaper? Why should we go from depending on mtGox to depending on Ripple?

It isn't centralised. And yes, we'll need the source code eventually, and the developers have already said know they will have release it to gain widespread acceptance. But even before that happens it will be a great way to exchange fiat currencies for BTC and to get BTC into the real economy.

[Tek-Ti]

But seriously, I admire the initiative. But fiat tends to make things difficult since electronic payment is not designed to be as decentralized as bitcoin...

Anyhow, distributed systems (preferably homogenous aka peer-to-peer) and security is quite my call. Working on a MSc degree in it too. Resources are exquisite thou.

[mmeijeri]

Sure, it's not going to be as easy as a completely virtual currency, but it will be a lot better than we have now and a perfect bridge towards a more virtual-dominated future.

[Luckybit]

But seriously, I admire the initiative. But fiat tends to make things difficult since electronic payment is not designed to be as decentralized as bitcoin...

Anyhow, distributed systems (preferably homogenous aka peer-to-peer) and security is quite my call. Working on a MSc degree in it too. Resources are exquisite thou.

So like I said you need to be funded. I'm also working on an MS but I'm not such a good programmer as many others so I can only be of service to help theoretically as I don't want to have the responsibility of writing low level code for this. I think the best design should win and I'd gladly help to peer review it, and I think the best developer should lead. I don't assume I'm the best, I just want the best to be chosen.

My advice? A call for white papers, proposals and designs on a next generation protocol. We probably have enough people with advanced degrees or IT background to peer review it. This peer review process in my opinion should be the standard and I don't understand why we don't have a dedicated mailing list specifically for idea propositions, peer review, white papers, and the like. The best ideas should be voted up, the problems we will face in the future will continuously become harder to solve, and the peer review and scientific method are the best way of solving it.

At the same time once the best solutions are found then we have to actually fund them. Why would we expect anyone to dedicate all their time to developing this for free and if they did it would take far too long considering how time sensitive this is. So lets at least find out if the community is willing to pay and how much and that is why I made this thread. If enough people pledge in this thread then the demand is there and it can be taken to the next level whatever that is. I'm looking at this swarm client proposal https://bitcointalk.org/index.php?topic=87763.0 thread and it's got many backers. There are other threads on this site getting pledges and funding, so why can't we do that for perhaps the most important single issue facing Bitcoin?

[Luckybit]

Sure, it's not going to be as easy as a completely virtual currency, but it will be a lot better than we have now and a perfect bridge towards a more virtual-dominated future.

Relying on Ripple isn't going to solve the problem though. Ripple from what I can tell just isnt going to scale up very well. Maybe I don't know enough about Ripple but the fact that they arent releasing the source code and are centralized means we can't rely on them anyway.

I don't see why we should wait on them or rely on them anymore than we should rely on BFL to release their ASIC products.

[Tek-Ti]

I may have some ideas that could address this problem. I'll see if these ideas grow and if resources emerge. I'll stick around in this thread meanwhile.

[Luckybit]

Look at this http://www.reddit.com/r/Bitcoin/comments/1c7v6z/buttercoin_open_source_highperformance_bitcoin/

We need to get in contact with them and see what they are doing.
No reinventing the wheel, it wastes time.

[mmeijeri]

Relying on Ripple isn't going to solve the problem though. Ripple from what I can tell just isnt going to scale up very well.

I see no reason to believe that. Why would it be less scalable than Bitcoin?

Maybe I don't know enough about Ripple but the fact that they arent releasing the source code and are centralized means we can't rely on them anyway.

I don't see why we should wait on them or rely on them anymore than we should rely on BFL to release their ASIC products.

Who's talking about relying on them? I'm suggesting we start using them, not relying on them. One of the most important things BTC needs in order to grow is a more reliable and resilient solution than Mt Gox for exchanging BTC for fiat currencies. If nothing else, Ripple is such a solution. More such solutions may still emerge.

[Luckybit]

Okay you want to use Ripple, let's steal their source code and fork it.

If you can't do this then you can't use Ripple without depending on them. It doesn't scale very well, but I'm not going to explain right now why.

[jon@bitcoinads.com]

I like the idea of a distributed exchange, it should aid in price discovery and increase market reliability.

But a distributed exchange is a challenge because it's almost a contradiction in terms. A market place is one location that people come to meet where they can exchange, when that location is distributed how do you trade? Exchanging BTC across a distributed network is easy but how do you exchange USD, or CAD across a network, that is the same problem that BTC solves so well.

Some people have suggested a mechanism for direct person to person payments while avoiding chargebacks (no paypal, rather bank deposits). It would be nice to have the distributed protocol incorporate a reliable method of determining an exchange between two parties, the amount, BTC delivery confirmation and other currency exchange confirmation.

A trusted escrow could reliably ensure safe BTC transfers but any dollar currency escrow would incur double bank transfer fees...

   

[mmeijeri]

But a distributed exchange is a challenge because it's almost a contradiction in terms. A market place is one location that people come to meet where they can exchange, when that location is distributed how do you trade?   

The system is physically distributed, but logically (or virtually) a unified whole. All nodes have a unified view of the ledger, and the consensus process takes much less time than with Bitcoin. The "ledger" also contains the order book. I don't see how this system could support very high-frequency trading, but I'm not sure that's actually useful. If it is, specialised exchanges could serve that market with their own privately developed order book and still be connected to the Ripple network.