450btc Bounty (Pledge) for Open Source Exchange project.

[Nefario]

No account.

Short and to the point.

Alternative options to an account based system, and why you think they are preferable.

I think accounts allow the development of reputation and facilitate trade based on that.

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[grondilu]

Short and to the point.

Alternative options to an account based system, and why you think they are preferable.

I think accounts allow the development of reputation and facilitate trade based on that.

I'm not saying we should not use accounts.  I'm saying it's a completely different application.

There are actually several free and open source accounting softwares.  Check in the corresponding category in http://www.gnu.org

What we need is a software that takes charge of exchanges.  Such a software can ignore accounting data, and focus on adjudication.

[Anonymous]

A bitcoin address could be your account number?

[grondilu]

A bitcoin address could be your account number?

Yeah but in order to make this useful, we have to wait for someone to make a tool for extracting a key from the wallet and output it in a openssl PEM ascii format.  Gavin said that he might be interested in adding that in his bitcointools program suite.

But as I said accounting is not the difficult part.  We should separate activities of accounting, clearing and adjudicating (I may be forgetting some).

Each of them should be able to interact with one another, unix-style.

Because I'm pretty sure developpers will want their own accounting system, or they might want not to implement clearing, and so on...

[Nefario]

A bitcoin address could be your account number?

Yeah but in order to make this useful, we have to wait for someone to make a tool for extracting a key from the wallet and output it in a openssl PEM ascii format.  Gavin said that he might be interested in adding that in his bitcointools program suite.

But as I said accounting is not the difficult part.  We should separate activities of accounting, clearing and adjudicating (I may be forgetting some).

Each of them should be able to interact with one another, unix-style.

Because I'm pretty sure developpers will want their own accounting system, or they might want not to implement clearing, and so on...

OK now I understand.

[ColdHardMetal]

No account.

This makes a lot of sense.

Having worked for a securities commission I can tell you they really start getting interested in what is going on when you start accepting money from people. You also run into banking legislation problems once you become a "deposit taking institution", or however it's phrased wherever you're from. There will of course be people willing to operate an exchange built around holding depositor's funds despite, that but if bitcoin gets too big and the government decides they want to shut you down they have a pretty trivial exercise to find you in violation of all kinds of regulations allowing them to bring the full force of their resources to bear on you.

At the same time there will be a point where the bitcoin economy is big enough to justify the expense of setting yourself up in a jurisdiction with a much less stringent regulatory environment, think traditional "off shore" banks. They are operating around the same restrictions we need to and get away with it just fine. Some of you may already live in places like that if you're lucky. The online nature of this complicates matters as well since if you're server is located in a haven jurisdiction that might be enough to keep you off the hook, or it might not, again it all really depends where you live and how serious your domestic regulatory agencies are about shutting you down.

All that being said I can't really envision a functional exchange allowing trades directly between participants that would work in a non-cumbersome way without holding deposits. Anything else would require a ton of work on the part of the exchange operator and rack up too many service charges with all the various banks and funds transfer services to really be useful.

So all that isn't super helpful in the end I suppose. I just wanted to make sure anyone contemplating using a software platform such as this (I'm one of them) is going into it with their eyes open if they weren't already, and this seems as good a thread as any to put it out there.

None of the above precludes developing the software, nothing wrong with that. As it should be, it's up to us as individuals to decide what we want to do with an available tool.

[fabianhjr]

...if bitcoin gets too big and the government decides they want to shut you down they have a pretty trivial exercise to find you in violation of all kinds of regulations allowing them to bring the full force of their resources to bear on you.

It is funny how in MMOs you could be banned anytime without an explanation. It is the same with govts. It shows they are in power. ;o

...it's up to us as individuals to decide what we want to do with an available tool.

I can guarantee you there will be the people who use it for bad karma matters and then the govt will use it as another excuse to hunt us down. It is sad that many of the great things are ruined by a jerk. At the end it is just a tool. It does no good nor bad. It is blind and it is simply an extension of the user.

[Anonymous]

You can buy child porn and fund terrorists with US dollars.

That doesnt mean everyone accepting US dollars is a child pornographer or a terrorist.

Something like a trade association is needed so that if they try to pull a stunt like that it doesnt affect the whole economy. If it becomes big enough to worry about by then bitcoin will have its own political lobby and to take it down they would have to refuse campaign contributions . Well you get the idea...

 

[fabianhjr]

It is if the big guy decides so. Since this is really one of the pioneering first ever things the govt got to choose based on its biased officials.(And most have trouble starting their computers)

[davout]

I'd like to collect the bounty with the open sourcing of bitcoin-central.net

[Nefario]

No account.

All that being said I can't really envision a functional exchange allowing trades directly between participants that would work in a non-cumbersome way without holding deposits. Anything else would require a ton of work on the part of the exchange operator and rack up too many service charges with all the various banks and funds transfer services to really be useful.

I would also like to have the system without accounts (it is easier to program and manage) but as you have mentioned above.

I was thinking having the entire exchange operating only in a darknet(only accessed from within i2p for example), and beyond the reach of any government. Since I am living and operating from within a totalitarian regime I must from the begining be out of government reach(and it will only be a matter of time before other governments attempt to destroy bitcoin, the easiest method to do so is shutdown bitcoin sites).

For items such as cash(Euro, USD), it would be impossible to trade with  someone without eventually learning at least their bank account number(for electronic transfers, so the two persons involved in the trade would learn the others account number) unless you meet face to face(or use the post, which is not practical in all environments).


Governments around the world will have so many excuses to attempt to stop bitcoin and a bitcoin based market. As you have said, terrorism, laundering, child pornography, financial legislation etc. the reasons do not matter, they will find some excuse. It is up to us to find a way to continue to thrive despite being illegal.

And in fact if a bitcoin market is successful it SHOULD have terrorists and criminals using it.

In a way you could describe our situation as that we are dead, and we just don't know it yet. But a good thing about being the dead is the living have no control over you anymore.

So, my original point is that this will from the begining be a kind of black market. It will at first be centralised on one machine(and become de-centralised as it grows, and spread across geographic boundaries) and can only be accessed through i2p. The servers actual physical location will be known only to it's direct operator(the person maintaining the physical machine). It could even be operating from inside North Korea (in theory) and there is nothing could be done to stop it.

[QuantumMechanic]

I think a lot of the software for what's needed for this is already written by FellowTraveler here: https://github.com/FellowTraveler/Open-Transactions/wiki.

Here's a use case to show how it would work:

By some payment method, trader Joe first buys $1000 worth of digital currency from a trusted currency issuer (say mtgox, so this is 1000 mtgoxUSD) who is operating on the same Open Transactions server as another whom Joe trusts who issues BTC backed currency (say mybitcoinBTC).  The Open Transactions server also functions as a marketplace so Joe can then sell his 1000 mtgoxUSD to someone else who owns some mybitcoinBTC at the prevailing market rate.  He then redeems these mybitcoinBTCs for real BTCs from mybitcoin.

Some neat things about this model:

• Trade can be effectively conducted between any number of national and digital currencies in the same marketplace.
• Multiple trading currency issuers along with separation of server and issuer is much more resilient, and it makes it much easier for new issuers to enter the market.
• Open Transactions has lots of other potential uses, so will (hopefully) be actively developed and maintained.
• "I would like to see the server side of OT become completely distributed as well." - FellowTraveler.  This would mean a distributed marketplace!
• Brokers can easily offer margin accounts.
• Basket currencies can be used in order to spread out risk.
• "Soon: Stocks that pay dividends, Bonds that pay interest, and Collateralized Debt Obligations."
• Privacy/anonymity when run over Tor or i2p.

Some work that still needs to be done:

• Develop user friendly client software, and use OT's XmlRpc / HTTP transport to develop a pretty web service.  (I think FellowTraveler mentioned people have already started doing this.)
• Research and openly disseminate payment methods, legal/regulatory issues, etc. in various jurisdictions to currency issuers.

[grondilu]

I think a lot of the software for what's needed for this is already written by FellowTraveler here: https://github.com/FellowTraveler/Open-Transactions/wiki.

Here's a use case to show how it would work:

By some payment method, trader Joe first buys $1000 worth of digital currency from a trusted currency issuer (say mtgox, so this is 1000 mtgoxUSD) who is operating on the same Open Transactions server as another whom Joe trusts who issues BTC backed currency (say mybitcoinBTC).  The Open Transactions server also functions as a marketplace so Joe can then sell his 1000 mtgoxUSD to someone else who owns some mybitcoinBTC at the prevailing market rate.  He then redeems these mybitcoinBTCs for real BTCs from mybitcoin.

...

We definitely should give this a try.  I unfortunately only have shell CGI on my webserver (no Perl, PHP, Python or stuff like that) so I can't do it myself.   But I'd be glad to help if someone wants to create a test-plateform.

PS:  However, I keep thinking we should avoid making a huge monolithic application for handling with everything.  Accounting is already taken care of by several FOSS project.  IMO, we need two applications : one for clearing and one for adjudication.

[Nefario]

I think a lot of the software for what's needed for this is already written by FellowTraveler here: https://github.com/FellowTraveler/Open-Transactions/wiki.
.......

After having a look my head exploded.

Now I must deeply research triple signed reciepts(and trueledger), Ricardian Contracts along with the general construction of open-transactions.

From what I have read it seems that this would be a good foundation to begin building with (if the documentation is not lying then it may be much more than the foundation).

So as I have said, I will begin on Monday, I will set up a dedicated server that can be accessed from i2p. I am unsure whether I should use OpenBSD or Ubuntu as the operating system for this server(which would you recommend? of course Ubuntu would be the easiest, but I assume OpenBSD would be more secure).

By Tuesday morning we should have something we can play with...I mean... test .

[grondilu]

So as I have said, I will begin on Monday, I will set up a dedicated server that can be accessed from i2p.

Hum, would you consider using tor instead ?

[Nefario]

So as I have said, I will begin on Monday, I will set up a dedicated server that can be accessed from i2p.

Hum, would you consider using tor instead ?

You know, if I could access Tor from inside China I would, infact if the Tor project manages to solve the China bridge ip ban problem I would be happy to run it on both services but it doesn't and I can't.

Also Tor is a LOT slower.

So for the moment it will be on i2p(because that is what works here) and at some future point Tor may be added. I have a question, why do you prefer Tor (or is there some vulnerability of i2p that you are aware of?)

But for sure it will not be a regular website that can simply be blocked or shut down by any government.

[fabianhjr]

I'd like to collect the bounty with the open sourcing of bitcoin-central.net

Ok link us to the source and tell us under which license it falls.

[Nefario]

I'd like to collect the bounty with the open sourcing of bitcoin-central.net

Ok link us to the source and tell us under which license it falls.

This meets the definition of a currency exchange(does it qualify for the bounty?), I was under the impression that we were going for a more general exchange(stocks, commodity's, etc.) but I do not think we should stop there(with only bitcoin-central.net if it qualifies), but that it would be a component of a more generalised exchange system. I would certainly like to be able to use it for a ChineseRMB/BTC exhange.

From reading about open transaction bitcoin-central.net would be the software that operates as a digital currency issuer(digital gold currency for example, but could be USD or whatever) that would be traded on the exchange. At least I think that is the case open transaction I think is more generalised.

Anyway, more details on this(Open Transaction) as I learn on Monday.

[grondilu]

I have a question, why do you prefer Tor (or is there some vulnerability of i2p that you are aware of?)

Because I don't i2p very well.  I don't know how to install and run it.  Is there a debian package somewhere ?

[theymos]

I have a question, why do you prefer Tor (or is there some vulnerability of i2p that you are aware of?)

I2P would be much easier to block than Tor if anyone cared about it. It uses a few "floodfill routers" to spread network information, so all you'd have to do to block I2P is keep track of the current floodfill routers and block them.