OT fails almost all of the criteria.
...
All of that said, I still believe that there is a place for OT servers as high-frequency trading hubs and *trusted* banks for digital cash. OT needs to be marketed at current exchanges as a far more secure, audit-able, and accountable system. If Mt. Gox or BitStamp implemented an OT api for managing your account it would be a major selling point.
Some more replies / comments...
1) It is based upon trust in issuers
In the case of Bitcoin and other cryptocurrencies, it will be based on trust in voting pools, with the risk distributed across pools on the client side.
In the case of gold, dollars, euros, etc you are correct that you have to trust the issuer who is holding your gold. But how else could you trade gold digitally, if there were not an issuer holding the gold? The same goes with dollars. I'm curious how you would have dollar trades without issuers.
OT has a user-centric philosophy. We cannot entirely eliminate the risk of issuers, but the idea is to distribute the risk across multiple issuers, for example, using basket currencies. I don't know how you would eliminate issuers entirely, and still be able to trade fiat and asset-based currencies digitally, but I'm curious how you plan to do so.
4) Issuers are creating bearer bonds (illegal)
I suppose this depends on the jurisdiction. But I should point out that the issuer would be fully KYC/AML compliant.
MtGox, for example, allows users to trade "dollar units" and "BTC units" that are issued by MtGox -- and MtGox allows users to withdraw those units, through a KYC/AML compliant process.
(And MtGox is still operating...)
3) Operating an OT server is like operating a mini centralized exchange.
The big difference being that OT servers are unable to forge receipts -- and with voting pools, an OT server will also be unable to steal your coins.
5) No dividends / financial incentive for *everyone* to use the system.
I'm not sure if I'm interpreting this correctly, but FYI, OT
does allow you to issue stocks, and to pay dividends on those to shareholders.
What prevents false-bids from being published from other OT servers?
Currently OT allows you to create bids even when there isn't enough money in your account to cover them. (But the bid will be removed from the market automatically if it ever fails to complete a trade.)
It would be possible, though, to alter OT so that it "stashes" the funds inside the bid itself, similarly to escrow, if that is preferable.
In either case, a trade could not complete unless there were funds to back it up.
I fully recognize that within a single server the price mechanism is valid, just not sure the purpose of BitMessage aside from finding arbitrage opportunities and that would imply some kind of trading bot and the ability to rapidly move funds between to OT servers.
I think the actual discovery process would be very rare. Most of the time your client will already have the list of servers it's using. And if its configured to perform arbitrage between any given two servers, presumably it's already created accounts on both sides.
We haven't added server-to-server wiring of funds yet, but it could be done (with or without Bitmessage) relatively easily.
We'll have a technical preview available in the coming months and I'm wondering if you can find the time to come see what we've built and give us some feedback. I really value your contributions to this community with OT and respect your skills. It would be great to get some of your feedback and suggestions.
Thank you. As you know, we are in our second round of funding and so we are extremely busy on this end, but if I get time to check it out I'd be happy to let you know my thoughts.
Good luck again.
