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Author Topic: IOU Systems for Bitcoin to Fiat  (Read 694 times)
charleshoskinson
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May 23, 2013, 05:38:49 PM
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BTCLuke and I have been studying the notion of a P2P Exchange and he has created this list of criterion:

https://bitcointalk.org/index.php?topic=212841.0

A P2P Distributed Exchange MUST:

1. Be without any central points of failure, since a government or two WILL be coming after it one day. I suggest a Bitorrent-like software schematic.
2. Show everyone a very large number of possible trades to choose from, (thousands?) so assets can form a stable price. (e.g. a Bitcoin is going for $120)
3. Transact trades pretty much INSTANTANEOUSLY, so when you're watching a graph and want to trade at a very specific time you can do so. (This is extremely important for arbitragers and other traders who help keep the price fluctuation down.)
4. Offer Graphs and APIs for for graphing like MtGox does.
5. Have three-user (trustless) trading, so a non-interested 3rd party always hosts the trade between the buyer and seller. (And should provide Escrow too!)
6. Hold and transfer VALUE, not just IOUs. (With Cryptocurrency this is easy... With fiat? Not so much.)

It seems criterion 6 may require an IOU system; however, is there a way to do it without the need for trust? Is anyone activity studying IOUs and methods to enforce repayment without regulation or trust?

The revolution begins with the mind and ends with the heart. Knowledge for all, accessible to all and shared by all
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ruggedman_dan
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May 23, 2013, 08:05:24 PM
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Really digging the brainstorming going on here.

I have been thinking of a project along the same lines. One thing I encounter during brainstorming is the need to make the P2P exchange centralized. I feel that the best way to gain a massive audience and create a vibrate trade culture built on trust is to have the exchange setup up like a business. Management, customer support, arbitration, escrow agents as employees etc.

That's just my personal opinion. The issue with my idea is that the gov't can shut down the exchange because it would be a business. The gov't can never stop individuals from trading.

Maybe the simplest way to go about it would be to think of the current otc market concept x100 with a few tweaks. More trades but with a more simplistic design with ease-of-use in mind. Everything remains independent. To solve the escrow issue, maybe have an election here on the forums? Elect independent escrow agents who have become trusted through trades and let them charge whatever fees they choose.

Good stuff guys.
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