[Alpha] Killer App for Bitcoin? BitPools - Vote with your bitcoins

[Elwar]

Currently in Alpha stage (back end created, working on visual side) I am happy to announce BitPools, a new way of pooling your bitcoins with other people and voting with your coins to get big things done.

The customer based overview can be found at the About tab at http://www.bitpools.com

From a more technical stance, when you sign up for your account you will also include an empty Bitcoin address. You will then fill that address with the amount you plan to use toward pledging toward projects. (It has to be empty first to verify that you did not just go out and grab someone else's address). From there you can either create a pool or join one.

Pools
Pools are basically groups of people getting together with a common goal. When a pool is created, the description of the purpose will be spelled out and a minimum pledge to join will be included. When you join the pool, a portion of your bitcoins from your bitcoin address will be dedicated to that pool. But you still hold your bitcoins in your wallet. When the pool grows large enough that they have enough bitcoins to put toward their common goal, then proposals will start being put forward.

Proposals
Proposals can be made by anyone (pool criteria may restrict proposals to only members). This is where it gets a bit more technical, click here to read about Dominant Assurance Contracts. Basically a proposal will be created, the proposer will fund a "Voter fund" with the proposal (or an address will be created and if there is interest, people can support the proposal by sending bitcoins to the "Voter fund"). The proposer will also include his/her own fee in the proposal along with the amount of bitcoins required to move forward with the proposal. Once the voter fund is sufficiently filled, a date will be set up and voting will commence.

Voting
When it is time to vote on a proposal, each pool member will receive a set of addresses with options (or a single address if it is a Yes/No proposal). A file with all addresses and their choice meaning will also be released, encrypted with a password. Before the end of the voting date members will then vote the amount of bitcoins required in the proposal by sending their bitcoins to the specified address. When the voting date has passed, the password to the encrypted file will be released. The BitPools site will automatically tally the votes and determine if the proposal passed or failed. If the proposal fails, everyone's bitcoins will be returned to their bitcoin address. If it succeeds it will be passed on to the address given by the proposer (this could be an escrow account or whatever the voters are comfortable with, that is part of the criteria for deciding to vote for a proposal or not). Regardless of the outcome, the "Voter fund" previously filled will be distributed to all voters. This creates an incentive for people to vote even those who would usually sit on the sidelines. At the very minimum the voter fund will cover transaction fees. If the proposal passess, a new pool will be created consisting of the members that voted for the proposal.

New Pools
When the proposal succeeds, those that funded the proposal will be part of the new pool. The proposal will include the exact same criteria as when a new pool is created. The new pool could be exclusive only to those that funded the proposal, or a fee could be created for entry by new members. The fee can then be distributed in any way to the current members. Imagine a club getting together to fund a club house, the members have already paid for the club house...new members would pay those original members to be allowed access and join their club. Again, this is all criteria that would be included in the proposal. It also allows for many unique ways of distributing fees (equally, more to early members, tiered, etc.).

Your funds are always under your control until you fund a proposal. It only resides in the BitPools cold storage during voting, then is immediately distrubuted once voting is finished.

tl;dr Welcome to the revolution.

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[BitcoinAshley]

Great idea! Some friends of mine are starting a non-profit organization that would benefit immensely from a system like this to manage pledges. Aside from that, I can think of tons of real world applications. Best of luck with the development.

[Elwar]

Great idea! Some friends of mine are starting a non-profit organization that would benefit immensely from a system like this to manage pledges. Aside from that, I can think of tons of real world applications. Best of luck with the development.

Thank you, I will be focussing on small organizations first so that the concept can take baby steps to explore this new type of organizing.

Ultimately it needs to be open source, p2p but starting with a centralized platform to learn what works and what does not is a good approach I believe.

[TECSHARE]

I think a very good use for this system would be to fund medical research that focuses on CURES for common diseases and not just proprietary treatments.

[solex]

Excellent idea!

One important project is closer to home. Which is funding etotheipi's trust-free lightweight node proposal for improving Bitcoin.

I would vote with coins for an implementation which achieves the goal of this:
https://bitcointalk.org/index.php?topic=88208.0

[Elwar]

This community could have used this system to get their road fixed and paid for it anonymously. As it is, the city may fine each contributor.

http://www.kgw.com/video/featured-videos/SW-Portland-neighbors-repair-street-city-fuming-207540181.html?c=n&fb=y&can=n

PORTLAND – A group of Southwest Portland residents decided they were tired of neighborhood potholes and hired a contractor to fix the problem. But the city might now charge those residents to bring those unpermitted repairs up to code.
 
Homeowner Peter Samson said that until about seven months ago he could barely even make it into his own driveway because the road in front of his Multnomah Village home—Southwest 37th Avenue–was unimproved.
 
He said driving home was like an off-road adventure. Neighbor Paul Hughes said the gullies created by the potholes channeled water into his home.
 
“It was obvious to all of us the city was never going to do anything on its own,” Hughes said.
 
They told KGW that when they spoke with city officials about the improvements they were told it would cost each homeowner about $20,000.
 
Instead the homeowners decided to take matters into their own hands. Last October they hired a paving company to do the job for only about $1,000 per resident.
 
But just last week they received letters from the City of Portland, stating that because the homeowners and the paving company did not get the proper permits, they are now liable for any run-off, flooding or environmental problems their unauthorized paving may cause.
 
“In this case because it’s a very steep hill, the rainwater and the storm water will run off, and run into a neighbor’s property,” said Diane Dulken of the Portland Bureau of Transportation.
 
Dulken said while the street looks good, a city engineer will still have to see if it meets code. If not, Hughes, Samson and other neighbors will have to pay the price to fix it. That could end up costing more than the original estimate for the permitted work. But homeowners said they are confident the work will be up to code.

[phelix]

The website does not work for me... does it use Java?

It has to be empty first to verify that you did not just go out and grab someone else's address

I could still grab someone else's address and wait until he fills it.

edit: did not mean to sound rude - like the idea and want to test it.

[MSantori]

This sounds like a great idea.  You know what they say, though: functionality is the best marketing.  I'm interested to see how you implement this plan.

I see you've read up on how to avoid money transmission registration: make someone else handle the money.  But who will you be using to hold and move the BTC?  I'm not aware of any currently licensed entity that has the capability of handling BTC.

[Elwar]

The website does not work for me... does it use Java?

By not working, do you get anything on the screen? It uses javascript. There should be no functionality of any of the pages yet.

I could still grab someone else's address and wait until he fills it.

An address does not show up on the blockchain until there is a balance. So you would have to know what address someone may one day use (out of billions of possible addresses).

[Elwar]

This sounds like a great idea.  You know what they say, though: functionality is the best marketing.  I'm interested to see how you implement this plan.

I see you've read up on how to avoid money transmission registration: make someone else handle the money.  But who will you be using to hold and move the BTC?  I'm not aware of any currently licensed entity that has the capability of handling BTC.

I agree, I have programmers working on the front end but have been testing the back end with API calls. I hope to open up for Beta testing in 2 weeks.

As far as money transmission, since I will not be dealing in government money I will not need to be licensed. Bitcoins can be moved by anyone (every Bitcoin node on the network moves bitcoins).

[MSantori]

As far as money transmission, since I will not be dealing in government money I will not need to be licensed. Bitcoins can be moved by anyone (every Bitcoin node on the network moves bitcoins).

I'm afraid that's not the state of the law.  Under federal regulations, and speaking only generally, a business who transmits currency (fiat or virtual) is a money transmitter.  From the recent FinCEN guidance that everyone is talking about:

FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means".... The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies. Accepting and transmitting anything of value that substitutes for currency makes a person a money transmitter under the regulations implementing the BSA.

Nonetheless, it looks from your description that you won't be doing that at all; some other business will be doing it for you.  Your company only sets up the voting pool - you don't actually handle the bitcoin right?

[Elwar]

As far as money transmission, since I will not be dealing in government money I will not need to be licensed. Bitcoins can be moved by anyone (every Bitcoin node on the network moves bitcoins).

I'm afraid that's not the state of the law.  Under federal regulations, and speaking only generally, a business who transmits currency (fiat or virtual) is a money transmitter.  From the recent FinCEN guidance that everyone is talking about:

FinCEN's regulations define the term "money transmitter" as a person that provides money transmission services, or any other person engaged in the transfer of funds. The term "money transmission services" means "the acceptance of currency, funds, or other value that substitutes for currency from one person and the transmission of currency, funds, or other value that substitutes for currency to another location or person by any means".... The definition of a money transmitter does not differentiate between real currencies and convertible virtual currencies. Accepting and transmitting anything of value that substitutes for currency makes a person a money transmitter under the regulations implementing the BSA.

Nonetheless, it looks from your description that you won't be doing that at all; some other business will be doing it for you.  Your company only sets up the voting pool - you don't actually handle the bitcoin right?

This has been discussed thoroughly at https://bitcointalk.org/index.php?topic=154672.180
The fact that they refer to currency refers to government currency (This is a limitation of 31 USC § 5312 (a)(3)). Value that substitutes for currency would be other "monetary instruments" that they are allowed to regulate under section 5311 et seq: travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material. Bitcoin comes into play when discussing "virtual currency".

Basically it says that FinCEN comes into play if you are dealing with government currency. I made sure to check on this when the guidance first came out.

[MSantori]

Basically it says that FinCEN comes into play if you are dealing with government currency. I made sure to check on this when the guidance first came out.

I read the analysis.  Respectfully, it isn't relevant.  I don't mean to derail your thread, so I'll call it here.

[BitcoinAshley]

Question:How do you prevent your website from being used for assassination market-type deals and other nasty stuff?

If your website is openly used for illegal purposes and you know of it, chances are you are vulnerable to litigation.

Illegal activities could take place on your system using code language i.e. appears to be harmless pooling for a NPO or something. Would you be liable in this case? The gov't could consider your function (help pool money and securely vote on its use, and send it to the recipient using escrow and multisig) as being expressly designed to enable illegal activity, depending on if there are existing laws/regulations that are applicable to your website.
Do you have a business attorney familiar with these matters and able to tell you whether or not there's some law in your jurisdiction that they could use to 'get you?' Perhaps there is some way that KYC or mandatory licensing requirements could be imposed upon you? Remember, there are cases of Tor exit relay operators being arrested for simply running the node so don't assume that plausible deniability will save you if you run a service that provides this kind of anonymity for pooled funding...
Finally, have you considered the possibility of starting this website as a Tor hidden service and/or as a Freenet site, possibly in combination with having it run on a normal public website;  simply to reduce the possibility of legal retaliation in case a terrorist group uses your service and the government decides to make a public example of you?

Probably all silly questions but good things to consider. Maybe NYCesquire would like to share some thoughts...

Bitcoin, BitMessage on top of OpenTransactions, and Bitpools - the combination is a rabbit hole of revolutionary economic changes...

[Elwar]

Question:How do you prevent your website from being used for assassination market-type deals and other nasty stuff?

I have considered the different types of illegal activity that such a service could be used for.

I do know that the terms of service need to be concrete to avoid most litigation. I will likely add that the use of the site cannot be used to initate force against anyone. Just as a community can pool their money to build a park, they could pool their money to hire a security team (police) to enforce some bad laws. Non-initiation of force covers most bad things people can do to each other. But it certainly needs to be hashed out.

Though in theory, people can do all of this coordination outside of the website but they could also pool their money together outside of the site as well so I doubt they would come there just to do the final stage of pooling their money if they are already coordinating outside of the site. Also, if it was all coded messages and such they could do the same with any crowdfunding site calling a bomb an "algae farm" or whichever.

And the proposals will come from escrow services which will be viewable, if someone creates the proposal of assassinating someone (or any use of force) it can be easily pulled before a vote goes through. And most escrow services will be vetted, mainly for the sake of the users that the money will be transferred to someone trustworthy.

Finally, have you considered the possibility of starting this website as a Tor hidden service and/or as a Freenet site, possibly in combination with having it run on a normal public website;  simply to reduce the possibility of legal retaliation in case a terrorist group uses your service and the government decides to make a public example of you?

I would like to move it more and more toward decentralization and anonymous as the concept becomes more hashed out. But starting out, I think the concept is so new that there will be some growing pains as we all gain a learning experience from this. I am no Satoshi

[phelix]

The website does not work for me... does it use Java?

By not working, do you get anything on the screen? It uses javascript. There should be no functionality of any of the pages yet.

OK, it is simply not finished then. Watching.

I could still grab someone else's address and wait until he fills it.

An address does not show up on the blockchain until there is a balance. So you would have to know what address someone may one day use (out of billions of possible addresses).

Or take one from this forum's signatures. It is not that much of an issue and the way you do it gives some protection. I only thought your statement was pretty bold.

[Elwar]

Or take one from this forum's signatures. It is not that much of an issue and the way you do it gives some protection. I only thought your statement was pretty bold.

True, I had not thought about people who's addresses have been emptied. But that is a gamble on how long it will be before someone has BTC in that account.

Though all that gives you is access to a group through your pledge.

But that is a good thought, maybe a requirement of verifying your address within a few days of registering would be good. There is not much point in registering if you do not plan on joining a group.

[Elwar]

I am sorry for the delay. I had hired someone to do the front end who assured me it would only take 2 weeks. He took a lot longer, I gave him some flexibility with the schedule since he was doing decent work for a pretty good price and there was no big rush.

He actually did get me to about the 80% point and then dropped off the face of the earth with other projects.

So I have taken over the front end work which for me has been a slight learning curve. The front end is written in extJs which I have used before and understood it on the project I was working on, but I had to read through all of his code to get caught up and back on track.

I am writing everything from scratch so I am not using WordPress or any CM system so that it will be very flexible and I can build it the way I want it instead of trying to push a square peg into a round hole.

Right now I am at the point on the front and back end to be able to sign up, set up your Bitcoin address, create a pool, all of the things needed for editing the pool, can create a proposal for the pool. Each group can view draft proposals, current proposals up for vote and past proposals.

The voting is working on the back end but I need to finish that on the front end.

Once you can go from creating an account to being able to vote I will open it up for Beta. It will still be rudimentary since I would like to add several other things but the basic functionality will be a good start for Beta.

I am posting this more of a motivator for myself to get back on track