Primer for a P2P Distributed Exchange

[fellowtraveler]

BlueMeanie is Joshua Zeidner, a java developer who contacted me a year or two ago regarding Open-Transactions and tried to start a company with me.

At the time he was very pro-Open-Transactions, and he was pushing very hard to come out to L.A. and work on a Java version of OT with me. He wanted to go right down to the courthouse and register a company so we could work on it together.

However, Johann and I ended up having to part ways with Josh due to his aggressive and toxic torpedoing of business relationships. (Several people can attest to this.) I regret that I ever had any dealings with Joshua Zeidner.

We are focused on building products, and won't engage further with Josh.

Anyone who has further questions can reach me at chris@monetas.net.

[bluemeanie1]

 I don't think I need to respond to each and every one of 'FellowTravelers' statements here.  Many of his statements are flat out incorrect.

 Fact is there is proof floating around as to the nature of his activities.

 I will continue to make accurate and possibly critical statements about OT, Monetas and Chris Odom mainly for the benefit of the community.  It doesn't really take much work to look into the character of the people involved with him, his company, and his project, and find out who they really are.  For example, just recently Chris claimed that the Confidence Chains concept was a Bitcoin Pyramid Scheme.  Perhaps I'm not so much 'out to get him' as he suggests, but maybe I'm one of the few people who actually DOES know what he is doing?  So if you're interested in the inside story on OT, maybe you should listen to someone who has worked with the project?  rather than the various Chris Odom sock puppets, web spam rings, etc. that he sets up?  Perhaps Chris is not progressing the Digital Currency space so much as looting it.  just a thought.
 

 Regarding Open Transactions, here are a few points that might help you in your assessment of this technology:

 1) is anyone using it for real applications?

   A:  not many people have even managed to get the thing running on their own machines.

 2) does it have any credibility at the theoretical level?

   A:  it uses concepts from well known researchers such as Ian Grigg, David Chaum, Ben Laurie, however none of these people have ever referenced the project.  In the case of Chaumian e-cash, the technology was laughably glued onto the digital vouchers part and doesn't apparently do anything.

 3) why does it appear to be much bigger?

   A:  unfortunately in today's world of software we have developers and people who have calibrated their behavior around the fact that people take interest in Open Source.  These new open source developers really have practically nothing in common with RMS, Linus and the other greats of open source.  Really they are businessmen who use Open Source as a marketing technique.  They attempt to appear to be in this class of people, when really they are in the class of people like P.T. Barnum.  For instance, RMS doesn't write books about picking up girls on the side.

 4) is it Peer-to-Peer?  Federated?

   A:  one of Chris' glaring inaccuracies is his claim that he never said OT was Peer-to-Peer.  Originally the project was labelled 'peer to peer currency'.   Later he switched this claim to 'federated' but it's not really clear as to how it's 'federated' either.  He explained recently on IRC that it's 'federated' because I can move the transaction content to another server.  Does this make web servers 'federated' as well?  The real story is it's a Digital Voucher server and there's really nothing new about it at all, other than it's an Open Source digital voucher system, which would be cool if I weren't concerned that Chris was trying to hide patents in the project.  Secondly the overall maturity of the code is greatly overstated.  For one it's in C/C++ and is difficult to compile.  He routinely announces on various marketing channels he designed(this IS one of his actual talents), that various features have been released such as 'smart contracts'- have they been tested?  proven in any way?  I heard at one point he was trying to get a Java developer involved to code it in Java but his absurd sense of self-importance forced this person to move on.  After unfortunately investing time parsing his rantings, you ultimately leave frustrated and even somewhat upset that this person is posing as a legitimate contributor to the digital currency world.  What is OT?  It's not difficult to duplicate all this functionality in Java with far less code.  No serious developers have done that yet because there is no reason to.

 Personally I am less interested in ideas like Monetas, and more interested in how we can make financial technology available to all.  It's very difficult to commercialize these ideas successfully.  Thus I don't think that any technology with the slightest commercial aspect is going to be a candidate.  This includes both OT and Ripple.  Regarding Chris, I view him as an unfortunate distraction.  The fact is this space is crawling with criminals and con-men.  It's a fact they are attracted to ideas that offer anonymous cash transactions.  I am not one of these people.

   The paper I've been posting is my latest contribution to the Digital Currency space.

  It DOES offer peer-to-peer.  It can be anonymized.  Im currently in the process of fully proving it by building a simulator application: https://github.com/BlueMeanie/ConfidenceChainsSimulation

  if you are interested in peer-to-peer currencies, this idea would interest you.  I'm more than happy to answer questions about it.  My hopes are that it can be used to build distributed exchanges, distributed asset types, etc.  I'd say that a working model is several months away at the least.

  -bm

[Bitinvestor]

So what's the problem between you two? Why don't you agree to disagree and then move on? You both seem to be intelligent and if you can't work together then don't!

[bluemeanie1]

So what's the problem between you two? Why don't you agree to disagree and then move on? You both seem to be intelligent and if you can't work together then don't!

There are some unresolved debts between us, but aside from that I don't have any issues.  You might find it funny to hear that I came up with the name 'Monetas' and Chris was supposed to return the domain name to me.  I'm here to share my knowledge with people.  Part of my knowledge is about the real nature of OT, Monetas, etc..  I am probably among a handful of people who actually does know what is inside OT, and I can prove my involvement with the project.  Chris doesn't like that there is someone walking around who is 1) informed 2) credible AND 3) not invested in his project.  So maybe if you stay tuned you'll hear other funny things about Monetas and OT.  Chris is quite a character I'll grant him that.

I'm not interested in destroying anything someone has built that is positive and helpful, however I am interested in dispelling half-truths and lies that might exist in the region I operate in.  People are starting to catch on that the claims made about OT are not exactly straightforward, but they don't know the extent of it.  Just to be 100% clear, I left the project because I felt that Chris was not being straight forward with the community, not to mention I felt some of the other member were sketchy to say the least.  One of them is legally prohibited from entering the US.  I just simply didn't want to be involved.  I thought that this space was too important to turn into a cheap money-making scheme.  I don't put down people for trying to get financial support for something like this, I might be seeking my own soon.  But there is a right way to do it and a wrong way.  Chris tries to make me out to be a grumpy sulking type, but really I was the idealist in the equation.

[charleshoskinson]

Gentlemen this is not the place for your grievances. The purpose of this thread is to address the notion of a p2p exchange and the technology required to make it both secure and minimize the need for trust. If you have something to contribute towards that end, then please do so. We cannot nor desire to get involved in your business affairs. 

[bluemeanie1]

Gentlemen this is not the place for your grievances. The purpose of this thread is to address the notion of a p2p exchange and the technology required to make it both secure and minimize the need for trust. If you have something to contribute towards that end, then please do so. We cannot nor desire to get involved in your business affairs.  

I can certainly respect that, but I need to be able to make accurate statements about OpenTransactions without getting personally attacked.  OT seems to come up on just about every subject, primarily because Chris is going around making unfounded claims about it.  If you review the thread, I was not the one coming out with personal attacks.  I was simply defending my name. (note: Chris has since deleted this slanderous attacks)

and btw- anyone who wants to meet me in real life can find me at the Bitcoin NYC meetups.  http://bitcoinnyc.org/

I'm always happy to chat on topics of financial crypto, alt-currencies, altchains, etc.

[charleshoskinson]

Ok both of you guys PM me. I'd love to know more about Open Transactions and I've been trying to find some people in the community to do a lecture for my free crowdsourced course https://www.udemy.com/bitcoin-or-how-i-learned-to-stop-worrying-and-love-crypto/. We could use it as opportunity to correct misinformation about OT.

[bluemeanie1]

Ok both of you guys PM me. I'd love to know more about Open Transactions and I've been trying to find some people in the community to do a lecture for my free crowdsourced course https://www.udemy.com/bitcoin-or-how-i-learned-to-stop-worrying-and-love-crypto/. We could use it as opportunity to correct misinformation about OT.

I've really got nothing to hide about it.

to be completely clear:  I think the capabilities of OT are routinely overstated and misstated.  Notice that there is lots of abstruse language surrounding all it's advertised features(federated, etc.).  Whenever you encounter something like that, there should be some kind of credible source of information to clarify.  In the case of OT, there is none.  That's a sign you're dealing with Marketichture as we call it in the IT world. For instance I have a complex idea called Confidence Chains and it has specific qualities.  Anyone who is curious to know exactly how it works can easily find this paper on the web.  My claims are based in hard science and I'm currently working on making these claims abundantly clear, so much that an average user can watch Confidence Chains being formed in different power structure scenarios.  From there a prototype will be developed.  With this basic software, people will be able to implement altchains of different types, p2p digital assets, p2p exchanges, p2p auctions and lots of other fun things.[1]

We've had digital vouchers for a long time.  As far as financial crypto is concerned, there's nothing new there.  It would be cool to have a Open Source digital vouchers system.  There are many interesting applications you could implement with such a system.  As it stands I'm still not convinced that there are no proprietary hooks in OT.  I have very good(and provable) reasons to make this claim.  We, the community have no insurance against the problem.  Even if Chris were being 100% sincere(and I don't believe he is) we still dont have this insurance.  What are the investors investing in?  Last time I checked the company was formed in some offshore tax haven.

[1] I'd like to add here that the software will be Apache/BSD licensed.  OT is GPL licensed and Chris had explained to me many times that this gives him the singular advantage of being the only one who can modify the software for commercial purposes.  In other words, you 'contribute', he profits.  Fact is his understanding of these laws are patchy at best.

[timeofmind]

What is all this fluff about "it isn't what he says it is" etc? I mean, software is all algorithms. If the theory is sound, then so is the software that results from that theory. We can all validate the soundness of whatever concepts we wish to discuss, purely by working out the logic of it. Do you have to convolute this conversation with people's suspicions, intentions, emotions, etc? You tell us what your ideas are, and we'll tell you whether we think they could work. Simple.

[bluemeanie1]

Gentlemen this is not the place for your grievances. The purpose of this thread is to address the notion of a p2p exchange and the technology required to make it both secure and minimize the need for trust. If you have something to contribute towards that end, then please do so. We cannot nor desire to get involved in your business affairs.  

I agree fully, and this is why I will not be responding to "bluemeanie1" beyond my single response. It's unfortunate that he felt the need to get inappropriate and defamatory on this forum in the first place. If he erases, I pledge to do the same.

Chris, are you trying to appear as if you're not attacking me personally?  I mean, have you bothered looking back on this thread?

I haven't stated anything inaccurate or distorted.  Of course Chris wants to take this thread down, he looks like an complete clown.

regarding the other comment here, someone like Chris is really exploiting the openness of the community.  Everything I've said is 100% true, if you want to believe whatever claims he is currently making, that's your problem and the risk you run communicating on the internet this way.  As I said, anyone can come meet me IRL(see above).  I don't like getting into discussions like this, but if Chris chooses to attack me, he leaves me no choice.  I haven't done anything wrong.  What Chris forgot is that I have proof of all my claims.

here's a highly relevant question: if Open Transactions is really a 'community' open source project, why is Chris so defensive if anyone is critical about it?  sounds almost as if this is some kind of property of his... doesn't it?

have a great Memorial Day.

-bm


ps. what serendipitous timing to come out with this new BitMessage + OT idea exactly when I released my paper(that Chris claim he never read).

[BTCLuke]

Hopefully the Drama Llama has wandered off this thread for good, and we can get back to the original point of this thread, which is "what criteria does an ideal P2P Distributed exchange require?"

Reposting from just before the Llama attack:

I have a 7th criterion to add:
7. It must not be assumed that the individual users have access to less information than the network as a whole.

As mentioned, the are numerous P2P exchange threads popping up. The ones that sound the most plausible on the surface are also the most flawed: That the network as a whole can somehow authorize things that individuals can't. This violates the laws of the universe...

I am not much of a coder at all, (just html) but I personally don't think I would have violated that criterion.

However, if the coders here feel that this problem will pop up again and again without this 7th criterion on the list, then I'm all for it.

CODERS: Please Yea or Nay phillipsjk's suggetion.


I've got another one now... Let's assume other coders agree on 7, so this will be 8:

8. It must be easy enough for Laymen to understand. (The grandmother clause)

Basically, the ideal exchange should be easy enough for even your grandmother to make her first trade on. Therefore, we should not require extensive understanding of cryptography, code, cryptocurrencies, nor even economics to operate this software...

No abstract ideas required to understand the fiat safely, either! Grandma thinks she knows what $1 is, and no matter what your idea for a fiat replacement is, $1 worth of it had better STAY worth $1 over time, or the whole enterprise will leave a bad taste in her mouth... If not piss off governments even more.

Try to think of your enduser as a grandma who just learned what a bitcoin is and wants to buy one. If you can't make a software for that person, you're wasting all our time.

So what say you coders? Yay or Nay on #7?

What say everyone about #8?

[bytemaster]

I support both 7 and 8.

In response to the grandma test, I have been talking with a lot of people aged 30 to 70 and most of them seem to get what I am talking about with my peer-to-peer bank without actually having to understand the economics completely.

Those on this forum are a bit more demanding on the 'proof side', but that is what I would expect of early adopters.   Early on asking the creator of bitcoin to 'prove' why bitcoins had value would have resulted in very difficulty discussions involving the nuances of economics.   Even now people disagree about *why* bitcoins have value, but because they have a history they have gained trust by people who don't care why.

So I would add an caveat to test #8... it must be usable by grandma after 1 or 2 years on the market and having been proven by early adopters.

[Mylon]

Both 7 and 8 supported here too.

Depending on who I talk too here, it gets better or less well understood. Anybody that knows bittorrent, is automatically accepting the p2p "bank" thing. When not, having mostly difficulty with getting them to understand the p2p concept. As far as bitcoin goes, they are getting there, know I sparked a lot of peoples interest

As for the caveat to test #8 grandma learning time is 2 years (About 2 years ago had my grandma come to me, trying to explain email, how genius it was that you could send a letter instantly to any of your friends, and that they could open it and read, while you were on the phone... thats how quick it was... It made me very happy (even though I had been explaining email for years... when she actually started using it (because her friends kept asking) it was a revelation.) I'm hoping I'll see the same thing with bitcoin some day. I tried the "Do you remember the email vs post thing, this is the new email for money" but it didn't stick, but I'm not giving up hope.)

As for fiat -> BTC, I've been thinking about it a lot, and the only way I see it happening as long as the governments keep trying to disrupt it is like this.

fiat -> crypto securable intermediary, worth a fixed value of fiat -> BTC

When you develop these module/plugin based, you give everyone the freedom to add whatever they want, as long as its meets the rules of verifiability of the exchange.

Personally I see here an opportunity for gift cards that you can check online for their balance. Through escrow, this could be an instant fiat -> btc txn, gift cards are a fixed price in shops, they have a fixed value at a company. It all comes down to whether you trust the company or not, and here comes the beauty there are so many companies that give out gift-cards that are checkable nowadays.

There must be dozens of other possible implementations of this, but this should be the goal. Get a crypto -> crypto exchange up, modular based, with plugin support for stuff like this. When it works, there is a good chance regular fiat -> btc exchanges join in, with their own central-blockchain, for every fiat you deposit at them, you get one coin back, to trade on crypto p2p exchanges. (This makes the game for them easier, no real exchange to build (so no Goxx lagg), and they can ofc create beautiful web pages for easy trading. And there people who trust the exchanges, can put their money.)

This is as simple I can think of, and as true to all 8 as possible. (ask your grandma how much the $50 dollar Walmart gift card is worth)
My only concern / problem is, in some way your still trading in IOU's, but in my opinion this is unavoidable when trading fiat, as the Dollar, Euro, Pound, Yen or whatever, is technically also an IOU you got from your government.

Or am I totally wrong here and should I completely change my view because this could never work? (my focus is particular towards the modular / plugin design, to you give people the change to add more to it. (and thus technically also have incentive to build a different one, just help upgrade the current one) where looking 5 years down the road, you have hunderds of different crypto currencies, and / or crypto shares being traded. Eventually even pulling over the existing stock market, as we have an open source scalable design, where any company with a reputation can join as long as they follow a certain set of rules.)

[bluemeanie1]

Mylon,

  practically everything you mention could be supported with Confidence Chains.  The core problem is how to reliably and objectively manage transaction ORDER(ie. chronology) over a P2P network with unstable latency and connectivity.  Not exactly an easy problem to solve.  Confidence Chains solves it by allowing N identities negotiate the order of transactions as they appear in the chain.  Thus different nodes may receive a transactions at different times, but they all must agree as to what order they appear in the transaction record.  Order is extremely important for exchanges.  If someone has some kind of fiat power over the order of transactions, they can manipulate the market and determine winners and losers.

  thus it works like this:

  we have tx¹ - tx¹⁰, they arrive at each node N at different times, but it is possible to determine the intended chronology to an extent.

  how does the exchange decide the chronological order?  Confidence Chains has an algorithm that allows these nodes to negotiate this order.  Many configurations are possible.

  This makes it possible not only to build a p2p exchange, but a p2p auction, and many other financial instruments, in addition to the basic feature which is asset issuance and transactions.

  "5 years down the road, you have hunderds of different crypto currencies, and / or crypto shares being traded."  the NYSE has close to 2,000,000,000 trades PER DAY.  There will be far more than a few hundred currencies/shares/asset types.

 -bm

[BTCLuke]

Both 7 and 8 supported here too.

Alright, that makes about 5 people that supported both the 7th & 8th criterions. (I got some by PM.)

I'm going to throw them both on the official list, with the caveat that grandma's generally don't learn anything in a reasonable amount of time.

Personally I see here an opportunity for gift cards that you can check online for their balance. Through escrow, this could be an instant fiat -> btc txn, gift cards are a fixed price in shops, they have a fixed value at a company. It all comes down to whether you trust the company or not, and here comes the beauty there are so many companies that give out gift-cards that are checkable nowadays.

I thought about gift cards, but the very concept of them has two inherent flaws for their use as money:

1. When you pay $10 for one, it is instantly worth less than $10 is, because you can't use that money elsewhere other than one store. Therefore, this is not fungible at all since most people won't want that value only at applebee's, for instance.

2. They are generally physical. (There are exceptions, but they aren't the norm.) Who's going to store them? Wouldn't that be viewed as a bank and be seize-able by governments?

Sadly I find no way around inventing a wholly new crypto-security to act as Fiat on all P2P Exchanges. Nothing that exists now is going to work, the governments of the world have already squashed those that would.

Case in point.

[Mylon]

Bluemeanie, you got me convinced, I'll make time and dig into your confidence chains and wrap my head around it. I'll be posting my opinion on it in your topic

Personally I see here an opportunity for gift cards that you can check online for their balance. Through escrow, this could be an instant fiat -> btc txn, gift cards are a fixed price in shops, they have a fixed value at a company. It all comes down to whether you trust the company or not, and here comes the beauty there are so many companies that give out gift-cards that are checkable nowadays.

I thought about gift cards, but the very concept of them has two inherent flaws for their use as money:

1. When you pay $10 for one, it is instantly worth less than $10 is, because you can't use that money elsewhere other than one store. Therefore, this is not fungible at all since most people won't want that value only at applebee's, for instance.

True, however on a exchange it would just find its own price, I totally agree its not perfect. (you would see a big percentage cut) But as you are saying there is nothing perfect in getting fiat to btc instantly.

I've having trouble wording this, but what I'm trying to say, is that people who really get bitcoin at the moment, know that there are very few alternatives, and getting the ability to technically trade usd to btc instantly, I believe a lot of people would be willing to take the extra route. (its easier than meeting someone face to face, especially in most places, current exchanges lack liquidity, imo at the fear of getting bank accounts closed) Also keep in mind that this solution is only as temporarily as it needs to be. (hopefully sooner or later the governments will realize they are on the wrong path, and stop what they are doing)

Last but not least, this is going to be a favorite method of panic selling. Exchange down, bitcoin price dropping, you wanna sell, what do you do, you dump it in gift cards. (will retain their value at the store, and never tried it, but if you return a product bought with a gift card, do they give you cash back? ) It feels like with these you would always be able to convert btc to fiat and back, though at a hefty fee at times. (panic selling isn't gonna be cheap )

BitPay and Gyft launched a partnership, so clearly they see a business in it, don't see why it wouldn't work on a open exchange.

2. They are generally physical. (There are exceptions, but they aren't the norm.) Who's going to store them? Wouldn't that be viewed as a bank and be seize-able by governments?

Well.. every gift card is issued by its company, until companies start banning giftcards, I think we should be pretty safe. Difference in regions... here every single card, is just a "charge card" for your digital account. (or as they claim it, the card is the account, and you refill your card. (which is card number + pin to pay, card number to verify balance) We only have one left that is entirely physical, and thats sorta the national gift card.

Do some research on gift cards (especially ones that you can balance online) if you can find 5 different ones, you can buy within 15 minutes drive from your home, the availability is there, all that each individual user has to decide, is the fee worth it for them. (free market) You can still choose to go do a central exchange, they also take a fee, and their bank account can be seized... (if they globally ban gift cards, (or digitally checkable gift cards) I'll give up this idea, but until then, I feel there is a market for it, especially now since we have no decent way of instantly transferring USD into BTC.

Sadly I find no way around inventing a wholly new crypto-security to act as Fiat on all P2P Exchanges. Nothing that exists now is going to work, the governments of the world have already squashed those that would.

Case in point.

Agreed, thats why when building a peer to peer exchange, we should seek as many possibilities as possible. And to be honest you and me can brainstorm for a year straight on possible implementations of adding additional funding plugins to the exchange. And within a month after it goes online, somebody will code a plugin to use something as funding we haven't thought of.

So yea to start of I would really like to help seeing what I can do getting a modular designed p2p exchange up for crypto currencies, with the possibility of easy addable plugins, as long as its math is solid. (the core would have to verify the plugin is solid, to prevent people from getting scammed)

[bluemeanie1]

if you have any questions just let me know.

I am working on an upcoming paper that discusses how chains get formed under a variety of authoritative scenarios.

ex.

FIAT

ONE authority to rule them all. In this scenario one single authority manages the chain and can put anything it wants in there in any order, or it may omit anything. This structure is easy to manage and set up, not so easy to convince people to use.

TRIUMVIRATE

THREE authorities of equal power. Any 2 can override the third. This structure offers you the most stability vs. complexity tradeoff. Offers a sense of non-bias to users if the 3 authorities are disparate enough.

TRUSTEE

MORE THAN THREE authorities of equal power. Similar to TRIUMVIRATE but more nodes. Attention should be given to power geometry eg. odd number is favorable as it prevents stalemates.

KING AND COURT

ONE authority has MOST of the power, but the 'court' can override if unanimous. Operates somewhere in between FIAT and TRUSTEE.



of course more complex scenarios are possible, such as authority power deriving from membership in a social network.  Authority does NOT stem from Proof of Work, there is NO mining.

[charleshoskinson]

Blue could you reply to my PM?

[BTCLuke]

1. When you pay $10 for one, it is instantly worth less than $10 is, because you can't use that money elsewhere other than one store. Therefore, this is not fungible at all since most people won't want that value only at applebee's, for instance.

True, however on a exchange it would just find its own price, I totally agree its not perfect. (you would see a big percentage cut) But as you are saying there is nothing perfect in getting fiat to btc instantly.

I don't want to sound like a broken record here, but that price it would find is simply not going to be even close to the face value, would not be predictable, and it would vary so much that it's price would make bitcoin's look like the flattest chart ever... So gift cards just aren't going to fit the bill, if for no other reason than the price will never be "settled" for them.

What we really need here is a medium of exchange where all units therein are worth almost exactly $1 or 1 Yen or 1 Euro... To approximate those currencies on an exchange fluidly.

I've having trouble wording this, but what I'm trying to say, is that people who really get bitcoin at the moment, know that there are very few alternatives, and getting the ability to technically trade usd to btc instantly, I believe a lot of people would be willing to take the extra route.

Absolutely, and I agree that baby steps could be taken from "Its now possible for the techies to trade USD for BTC" to "Its now EASY for ANYONE to trade USD to BTC." -I'd be very happy to see a system that starts out as the former as long as it leaves itself the room to evolve into the latter.

Also keep in mind that this solution is only as temporarily as it needs to be. (hopefully sooner or later the governments will realize they are on the wrong path, and stop what they are doing)

History repeatedly shows us with bolded font to never, ever trust that this could happen.

It never has before.

Each and every time a large government of any type, be it democracy or commune or republic or whatever, falls, it exhibits the exact traits we are seeing today in the USA and Euro... On the way down the drain to complete collapse with hyperinflation and sometimes mass democide.

Governments have always, and always will, rely on their monopoly of force in times of distress. It's their one tool... And guess what? They're becoming distressed.

We just never had a distributed store of wealth before... Bitcoin really changes the game, and luckily for us, they don't seem to realize that fact yet.

BitPay and Gyft launched a partnership, so clearly they see a business in it, don't see why it wouldn't work on a open exchange.

I used gyft myself and had some Burger King via bitcoin. It was awesome tech indeed...

However I'm stuck with something like $0.28 on my BK card and there's certainly no way to get that off the card now... So I'm basically held hostage to either give BK more money that I don't plan to use, or simply Give BK that 28 cents as a gift... Which is likely to happen. (I'm no fan of junk food.)

I hope I see craploads of Bitcoiners realizes that they can now eat and shop with their bitcoins and ignore the fed into oblivion using gyft, but honestly I'd never, ever transfer BTC onto any gift card myself if I wasn't in their store already, using my smartphone, knowing I'm going to purchase with it within a minute or so...

And for that need, we already have gyft.

2. They are generally physical. (There are exceptions, but they aren't the norm.) Who's going to store them? Wouldn't that be viewed as a bank and be seize-able by governments?

Well.. every gift card is issued by its company, until companies start banning giftcards, I think we should be pretty safe.

I don't mean the banning of gift cards themselves... That's pretty impossible nowadays.

I'm talking about the hypothetical central office or company in which other people's gift cards were stored... A 3rd party business acting like a safety vault or bank for everyone's gift cards... Clearly this is something uncle sam would shut down in a heartbeat right now.

[bluemeanie1]

Each and every time a large government of any type, be it democracy or commune or republic or whatever, falls, it exhibits the exact traits we are seeing today in the USA and Euro... On the way down the drain to complete collapse with hyperinflation and sometimes mass democide.

Governments have always, and always will, rely on their monopoly of force in times of distress. It's their one tool... And guess what? They're becoming distressed.

One advantage to the Confidence Chains model is that you can place authorities in a number of jurisdictions.

For example, one authority goes in China, another one goes in Switzerland, another in Panama, US, UK, Germany, Russia, Brazil and even some autonomous zones eg. Transnistria. Given that there exist authority nodes in each of these places, no one government can shut down the currency.  The authorities in ALL these countries must cooperate to shut down the currency.  ALL the nodes must be seized in order to shut down the currency [3].  This is unlikely and probably impossible[2], and some authorities could be practically untraceable- ie running behind Tor from a dialup in Kamkatchka[1].  If one authority node were shut down or seized in some way(and these authorities could be run from a cell phone), transactions continue unabated.  You could potentially designate thousands of authorities.  You could create a complex system to derive authority.  There are far more techniques to evade seizure than there are laws to justify such a seizure.

thus, Confidence Chains offers a new level of political resilience.

-bm


[1] even very radical ways to connect could be innovated eg. embedding the transactions in images via steganography, and transacting through an image post board.

[2] until we have a "one world government".

[3] and note that in this case the people who seized the currency do not have the ability to steal assets, only prohibit transactions.