The Holy Grail! I wish I could kiss the author of Bitmessage on his face.

[fellowtraveler]

Last night, randy-waterhouse and I were experimenting with Bitmessage. (*smooch*!!)

Bitmessage is a p2p messaging (and broadcast / subscription) protocol, based on the Bitcoin protocol.

It uses its own blockchain, but the chain only stores the last 2 or 3 days worth of messages. (It's assumed they were delivered within that time, where they are then safely stored on the recipient's inbox.)

Combining the above Bitmessage capabilities--which we already proved out experimentally--with Open-Transactions, makes possible fully-decentralized p2p markets, as well as p2p escrow across OT federated servers, easy p2p and server-to-server wiring of funds and conversion of currencies, both within OT and also between OT and the conventional banking system.

Furthermore, this is possible with little-to-no changes inside OT itself, and will not require the issuing of credit, nor will it require any pre-mined currency.

How does it work?

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A few concepts...

--- First, keep in mind the concept that Bitcoins and Colored Coins (either/both) could be issued onto an OT server, without having to trust the server itself, through the use the multi-sig "voting pools" on the blockchain itself. I've already extensively discussed this on this board, and here's an article on how it's done:  http://bitcoin.stackexchange.com/a/834/309

--- Second, keep in mind that using Colored Coins instead of Bitcoins is advantageous in certain circumstances, as it allows users to buy/sell those colored coins (for the purposes of transmitting other currencies) without incurring any capital gains tax liability. (I'm not a lawyer and that's not legal advice. The basic gist is, if you buy a colored coin for $100, and sell it for $100, there is obviously no gain or loss.)

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T H E   H O L Y   G R A I L

Enter Bitmessage! (Which solves discovery across federated OT servers.)

As I said, randy-waterhouse and I already TESTED Bitmessage last night to prove experimentally that this is possible (and it worked.)

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Using Bitmessage with OT to effect server-to-server wiring of funds: http://pastebin.com/NjQgDarx

--- The wiring protocol is all about Alice trying to discover Bob so she can move her money from one server to another (and Bob trying to discover Alice so he can make a profit by moving money from one server to another.)

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Using Bitmessage with OT to effect escrow-based conversion of currencies across OT federated servers:  http://pastebin.com/S1W5guAQ

--- The currency conversion protocol is about Alice and Bob being able to choose a server they can agree to meet on so they can trade one currency for another inside OT. (For cases where they aren't already trading on the same OT server.)

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Using Bitmessage with OT and SEPA so that Alice can p2p send any currency which Bob receives as Euros in his Euro account: http://pastebin.com/SsLrxVP6

--- The SEPA transfer protocol is about Alice being able to send Silver Grams, which Bob receives as Euros in his Euro bank account. It's also about Jorg earning a profit in silver grams, by sending a SEPA transfer to Bob on Alice's behalf.

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We already knew that OT offered quite a few benefits to Bitcoin: http://bitcoin.stackexchange.com/a/2710/309

But now, combined with Bitmessage, Open-Transactions becomes a juggernaut!

The above protocols can be implemented inside OT wallet GUIs, such that they are automated and transparent to users.

May a million currencies bloom!

[gmaxwell]

I do not believe bitmessage uses a blockchain currently (it didn't when I looked at it before, and with a quick glance that doesn't seem to have changed).

A blockchain (and the resulting ~global consistency) isn't needed for traffic analysis resistant anonymous communication ... though it does have an effect of creating some unjammability.  I don't think bitmessage has unjammability esp for widely known keys.  I think unjammability is important for OT's usage here.

Am I confused?

[fellowtraveler]

Most of the capabilities were already latent in OT. Bitmessage is just what solves discovery.

(In fact you could swap it out for any similar solution which solves discovery.)

[marcus_of_augustus]

Whoa ... is this what I think it is, blueprint for P2P exchange?

[fellowtraveler]

Whoa ... is this what I think it is, blueprint for P2P exchange?

Yes.

[HostFat]

uuh! I really like to see some evolvement on this (and I'm already a fan of Bitmessage!)

[Birdy]

This does sound like it's a big o,O Is it?

[BTC Books]

Ahh.  Brilliant.  I'm still looking at it in detail, but this looks incredible!

It's the last piece of the puzzle:  the link between all currencies.

Oh - and the end of Ripple.  Rest In Pieces.  

[BitChick]

This is a little over my blond head.  I am assuming OP is excited because this means easier transfer of BTC peer to peer without the long wait for blockchain verification?  Can someone dumb this down for me?  THX

[Elwar]

Nice, I will have to check more into Bitmessage.

Does it require a client on your machine, or can it be done online?

[uMMcQxCWELNzkt]

I would like to suggest that they change the name if this will indeed become a successful P2P exchange. Perhaps a more interesting name would be beneficial later on when people wonder what it is.

[fellowtraveler]

I would like to suggest that they change the name if this will indeed become a successful P2P exchange. Perhaps a more interesting name would be beneficial later on when people wonder what it is.

The name is "Open-Transactions."

The above protocols use Bitmessage for the discovery layer, but any other discovery layer could also be swapped in.

[Joerii]

Wow. Just wow.

This is the start of something big.

I don't really understand it yet but I can recognise a revolution when I see one.

[uMMcQxCWELNzkt]

I would like to suggest that they change the name if this will indeed become a successful P2P exchange. Perhaps a more interesting name would be beneficial later on when people wonder what it is.

The name is "Open-Transactions."

The above protocols use Bitmessage for the discovery layer, but any other discovery layer could also be swapped in.

Great, I just want to make sure we iron out any new potential complications relating to Bitcoin projects. I hope this projects goes well, if I can contribute any design content(Free of charge) I will.

[Manawarp]

Economic technology is now one step closer to singularity.

[Piper67]

Wow, not sure if this means what I think it means, but after checking out open transactions, I have a feeling it means the end of the not so open Ripple idea.

[miscreanity]

Fantastic!

One thing I'm curious about is the propagation and validation. With the transaction notification being passed through bitmessage, acceptance is still dependent upon the receiver, correct? Txs therefore can be instantaneous, but might also incur a variable delay?

[bassclef]

This really looks like a promising idea. Will be following closely.

[TalkingAntColony]

Just learned about Bitmessage. I suggest people go read the white paper on their wiki - short and to the point. It has the potential to upset email because of the increased privacy, built-in mailing-list functionality, and anti-spam measures (proof of work makes it hard to create lots of messages fast). This Open Transaction use case is a perfect example of the innovation possible with it.

[uMMcQxCWELNzkt]

Out of curiosity if this was to gain momentum what would it mean for traditional Bitcoin exchanges? I am curious as today I just started working on a new UK exchange (small scale).

* I will be back on tomorow to read the paper too *