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

[Kazimir]

Also, imagine a hypothetical world where this has already completely been worked out, and a OT+BM based P2P exchange system is fully up and running. Suppose I want to buy bitcoins with euros. Two questions:

• 1. Where or how do I find someone who wants to sell his BTC, and how do we negotiate a price? (as is currently done by the existing exchanges in their market places)
• 2. Where (or to who) do I wire transfer my EUR, and how can I trust I will get the BTC in return?

[oakpacific]

Also, imagine a hypothetical world where this has already completely been worked out, and a OT+BM based P2P exchange system is fully up and running. Suppose I want to buy bitcoins with euros. Two questions:

• 1. Where or how do I find someone who wants to sell his BTC, and how do we negotiate a price? (as is currently done by the existing exchanges in their market places)
• 2. Where (or to who) do I wire transfer my EUR, and how can I trust I will get the BTC in return?

I have only a vague understanding, but I think for (1) the answer is Bitmessage, and for (2) it's escrowing(multisig).

[luv2drnkbr]

Oh man I can't wait for OT to be fully functional and usable and in the limelight and everybody's using it.

[themgp]

Sounds very exciting. But I don't fully understand it yet, I tried to read some material on Open Transactions and BitMessage but still missing the point. Can anyone summarize what it is that OT and BM do, exactly?

To my understanding, OT allows a distributed exchange of currency between two parties (among other things) and BM allows broadcasting of secure/signed messages (among other things).  When BM is combined with OT, there is now a way to have a fully distributed marketplace of buyers and sellers broadcasting bids and asks using BM then transacted using OT.

[Frozenlock]

Uh... I don't see the distributed marketplace. (As most here, I'm still trying to wrap my head around it.)

You would still need to
1. Obtain some kind of IOU (DGC)
2. Trade it at a particular place. (OT server)

[lexxus]

As far as I get it:

Digital cash token = IOU
Proof-of-work = transaction fee in XRP
OT server = Ripple Gateway
= Ripple validators

Also it's not clear what is meant by "Digital Cash instruments are stored on a client side". Should it be some kind of blockchain instead?

[oakpacific]

Uh... I don't see the distributed marketplace. (As most here, I'm still trying to wrap my head around it.)

You would still need to
1. Obtain some kind of IOU (DGC)
2. Trade it at a particular place. (OT server)

You are right, that's why the developer prefers the phrase "federated server".

The reason why it's different from Ripple, is:

1. By trading at an OT server, you can get cash-like untraceability.
2. When the cash token is denominated in bitcoins, you can check if it's sufficiently backed up by a escrowed address, because OT interoperates with the blockchain.

[johnyj]

From that pastebin:

"9. Alice's Escrow awakens in 1-5 minutes, and starts periodically checking (via SEPA calls) to see if BOB_SEPA has received the Euros. If so, she automatically releases the Escrow to Jorg's silver account on OT."

This escrow must be able to check the banking transaction via SEPA calls, and I suppose without a formal contract with banks, he won't be able to listen to those calls

Just like a gateway in ripple, this is the point of weakness for all the P2P exchange design: That escrow/gateway must be able to communicate with banks through an authorized channel and that channel is controlled by banks

The core problem is, all of the exchanges today still operate inside a banking framework (the exchange must have a bank account to operate). In order to bypass the existing banking system, there should first be a P2P bank that stores fiat money, that bank could in turn carry its exchange without the involvement of traditional banks

[lexxus]

From that pastebin:

"9. Alice's Escrow awakens in 1-5 minutes, and starts periodically checking (via SEPA calls) to see if BOB_SEPA has received the Euros. If so, she automatically releases the Escrow to Jorg's silver account on OT."

This escrow must be able to check the banking transaction via SEPA calls, and I suppose without a formal contract with banks, he won't be able to listen to those calls

Just like a gateway in ripple, this is the point of weakness for all the P2P exchange design: That escrow/gateway must be able to communicate with banks through an authorized channel and that channel is controlled by banks

The core problem is, all of the exchanges today still operate inside a banking framework (the exchange must have a bank account to operate). In order to bypass the existing banking system, there should first be a P2P bank that store fiat money, that bank could in turn carry its exchange without the involvement of traditional banks

Ah, cool. So here we have a battle of two concepts: Trust (Ripple) vs. Escrow (OT).

[oakpacific]

From that pastebin:

"9. Alice's Escrow awakens in 1-5 minutes, and starts periodically checking (via SEPA calls) to see if BOB_SEPA has received the Euros. If so, she automatically releases the Escrow to Jorg's silver account on OT."

This escrow must be able to check the banking transaction via SEPA calls, and I suppose without a formal contract with banks, he won't be able to listen to those calls

Just like a gateway in ripple, this is the point of weakness for all the P2P exchange design: That escrow/gateway must be able to communicate with banks through an authorized channel and that channel is controlled by banks

The core problem is, all of the exchanges today still operate inside a banking framework (the exchange must have a bank account to operate). In order to bypass the existing banking system, there should first be a P2P bank that store fiat money, that bank could in turn carry its exchange without the involvement of traditional banks

Ah, cool. So here we have a battle of two concepts: Trust (Ripple) vs. Escrow (OT).

THe whole point of using OT is untraceability, it's implemented around the Chaumian blind token technology, if you don't want untraceability, you don't want to use OT.

[Kazimir]

I have only a vague understanding, but I think for (1) the answer is Bitmessage, and for (2) it's escrowing(multisig).

Can I interpret it like this?

1. By means of BitMessage we can have some P2P market place. I mean "marketplace" just in terms of distributing bid and ask offers throughout anyone interested, not the actual money transactions.

2. Multisig = I can setup some kind of 'combined transaction' with the seller, where I transfer my euros to him, and he transfers his bitcoins to me, and this is effectuated as an atomic transaction (i.e. can't abort or undo half way), and this two-way transaction can only become effective after we both signed it? Or am I completely mistaken?

How does escrowing come into play here?

[themgp]

Uh... I don't see the distributed marketplace. (As most here, I'm still trying to wrap my head around it.)

You would still need to
1. Obtain some kind of IOU (DGC)
2. Trade it at a particular place. (OT server)

From my understanding of FellowTraveler's initial post, BM is used for matching Bids and Asks by creating an exchange protocol on top of BM that interested parties can subscribe to.

[kcirazy]

This is amazing. I was already looking into OpenTransction, but this makes it so much more usable and complete.
Combining these two sounds very promising. Subscribing to this thread.

[marcus_of_augustus]

Is there a running OT server now?  (I assume there is one owned/operated by monetas.net?)  Are there others out in the wild?  If there are a couple of OT servers and the BM protocol can be established, all we need is an application that combines the two together to get a running P2P exchange, right?

Pretty much. AFAIK monetas is not running an OT server ... there is actually only 2 alpha that are on-line (but know of at least several others in testing off-line phase) ... server contracts and asset contracts used on the operational gaming TX server "Digitalis" (and Demo server where public can issue assets)  for the Galactic Milieu can be found here

http://sourceforge.net/projects/galacticmilieu/files/

[oakpacific]

I have only a vague understanding, but I think for (1) the answer is Bitmessage, and for (2) it's escrowing(multisig).

Can I interpret it like this?

1. By means of BitMessage we can have some P2P market place. I mean "marketplace" just in terms of distributing bid and ask offers throughout anyone interested, not the actual money transactions.

2. Multisig = I can setup some kind of 'combined transaction' with the seller, where I transfer my euros to him, and he transfers his bitcoins to me, and this is effectuated as an atomic transaction (i.e. can't abort or undo half way), and this two-way transaction can only become effective after we both signed it? Or am I completely mistaken?

How does escrowing come into play here?

See here for fellow traveler's proposal: http://bitcoin.stackexchange.com/questions/517/how-can-a-single-person-operation-keep-a-collection-of-online-wallets-secure/834#834  the escrowing is used to make sure the OT server will not default on its IOU, and you want to trade on an OT server because you want untraceability(that's right, the server operator cannot figure out who are you sending money to, unlike a mixer operator). An OT server also only signs receipts, and do not store any real currency, so in case of a government raid, they will get nothing.

[johnyj]

Just like a gateway in ripple, this is the point of weakness for all the P2P exchange design: That escrow/gateway must be able to communicate with banks through an authorized channel and that channel is controlled by banks

Yes, as long as you have to communicate with legacy bank systems, you will have to follow their rules and regulations KYC etc...
Do not expect this to make proper exchanges obsolete all of the sudden. You need to take the commerce completely out of legacy bank system to not depended on whims of the banks. Or we could just buy a few banks... and have them run some OT servers.

In a traditional bank system, bank A open an account in bank B and bank B open an account in bank A, and they can do transactions both way. But due to bitcoin is not a single entity, traditional banks can open accounts in bitcoin network while bitcoin network can not open a bank account at traditioanl bank, only individuals can

I still think localbitcoins.com is better than the idea of P2P exchange

[minimalB]

This is truly amazing!

[Rampion]

Just like a gateway in ripple, this is the point of weakness for all the P2P exchange design: That escrow/gateway must be able to communicate with banks through an authorized channel and that channel is controlled by banks

Yes, as long as you have to communicate with legacy bank systems, you will have to follow their rules and regulations KYC etc...
Do not expect this to make proper exchanges obsolete all of the sudden. You need to take the commerce completely out of legacy bank system to not depended on whims of the banks. Or we could just buy a few banks... and have them run some OT servers.

Ok, let's crowdfund that

[CryptoCat]

I think someone has to call the Winklevoss twins or someone with a lot money and tell them to start a p2p bank
Following this Thread, i'm curious about future development!

[oakpacific]

Drama....

We, opencoin, are a project that started in 2007 to create an open source version of the electronic cash system invented by David Chaum. It is about minting tokens that can be transfered in a non-tracable way. It is fast, and the user has full flexibility on how to do the transfer.

We have nothing to do with "OpenCoin Inc.", a new company that is developing the ripple network. Unfortunately they decided in 2012 to name their company the same as our project. That creates a bit of confusion, as both are about electronic transfers.

So, if you want open source digital cash, opencoin.org (or our repo on github) is the place to be. If you want an account based system like the ripple network, it is not.

From http://opencoin.org/Members/jhb/opencoin-and-ripple