Codename: EasyCoin

[fascistmuffin]

I think some people are looking at the idea in a weird way and/or not understanding the basics.

Lets look at Dwolla (or paypal, but paypal is a bit more evil). When you transfer money there, it goes into a giant Dwolla bank account, and all you get is a number in a database representing that you have X amount of funds deposited in Dwolla. Wonder why transfers between banks and Dwolla take forever and transfer between Dwolla accounts are fast? It's because they basically change your numbers in the database. No money has actually moved. Dwolla and paypal don't make money from inflating it and loaning out non existing money, they get a bunch of fee's.

The Easycoin idea would work the same way. You deposit bitcoin in the Easycoin account, and you get a database entry for your amount. When you spend/withdrawl/deposit your funds are updated. Yes, there are ways to inflate the currency by misleading people with the amounts in the database, but Atlas' idea includes a way for the public to audit the site.

Also, personal attacks are not a good way to discuss a topic.

[flug]

I think a much better solution is to provide a set of services around bitcoins as a currency - this is already being started. I'm personally in favour of the bitcoin banking proposal outlined here.

+1

I love the comparison between 'banks' and 'mail servers'.

"You can currently choose between gmail, hotmail, yahoo, a local provider or even open your own mail server."

Similarly you can choose to either go with an existing bitcoin bank or run your own bank.

This is a fruitful area of investigation, I feel.

[molecular]

The geek in every family can set up the family's own bank using some open source bitcoin banking software.

Dude, wait! Being responsible for all the friggin' computers and everything that ever happens to them is troubling enough already and I'm more than glad I quit that job a long time ago. Being responsible for my families money being safely stored in some opensource wallet? No thanks!

[flug]

The geek in every family can set up the family's own bank using some open source bitcoin banking software.

Dude, wait! Being responsible for all the friggin' computers and everything that ever happens to them is troubling enough already and I'm more than glad I quit that job a long time ago. Being responsible for my families money being safely stored in some opensource wallet? No thanks!

It's a step up from everyone in my family running the bitcoin client on their virus infected windows laptops. But I take your point, I wouldn't like the responsibility either. I'm pointing to the idea that small local bitcoin banks should be easy to create within a bitcoin banking infrastructure. (I like the analogy of the mailservers I quoted in my previous post).

[Anonymous]

If witcoin.com had a way to let external sites access and use witcoins (which are bitcoins stored in a database) you would have easycoin. All we would have to do is let people buy and sell witcoins which are tied to a user account. This is a dangerous area though because you get into money transmitting laws...

The reason we did it that way was to allow micro transactions without needing to pay fees on the bitcoin network. You can withdraw them as bitcoins at any time. You cant pay .00000001 bitcoins without paying a fee but you can pay .00000001 witcoins to vote on something or donate/support other people without it touching the bitcoin network.

Databasecoins are a different animal to bitcoins. One way to prove you have all the actual coins onsite is to transfer them to a bitcoin address provided by an auditor who then transfers them back to your site. Then the site has to trust an auditor with the customers coins.

[mouse]

If witcoin.com had a way to let external sites access and use witcoins (which are bitcoins stored in a database) you would have easycoin. All we would have to do is let people buy and sell witcoins which are tied to a user account. This is a dangerous area though because you get into money transmitting laws...

The reason we did it that way was to allow micro transactions without needing to pay fees on the bitcoin network. You can withdraw them as bitcoins at any time. You cant pay .00000001 bitcoins without paying a fee but you can pay .00000001 witcoins to vote on something or donate/support other people without it touching the bitcoin network.

Databasecoins are a different animal to bitcoins. One way to prove you have all the actual coins onsite is to transfer them to a bitcoin address provided by an auditor who then transfers them back to your site. Then the site has to trust an auditor with the customers coins.

For auditing, you dont need to move all the coins, just prove you have control of the address they reside in. There are probably hundreds of ways this could be achieved. Some kind of zero-knowledge proof on the key? Anyway I remmeber reading a number of already posted schemes to handle this problem.

This part of the post is directed at nobody in partucular. Just a general comment.
One of the issues I see with a lot of these 'lets make a php website and store the bitcoin as a database field' is that it completely invades everyones privacy. Sure, I bet you all promise not to tell anyone who i sent my coins to, including the porn merchants who may also have an account on your site (that i wish to keep private), but why should I have to believe you? What happens if a court orders you to reveal the transaction history? Are you liable to comply?

This is why, a few posts ago in this thread, I linked a bunch of research into their problem already and some open source projects that are implementing it.

Nobody is going to trust your service long term, big scale, if it doesnt use some kind of chaumian blinded signature scheme for the tokens. But I suspect almost no current 'bitcoin bank' type services even know what that is.

[Eri]

well for starters, the site wouldn't need to know who you are, just that you have the right pass for the account and that the account has 10BTC in it. If the Govt wants to be dicks about it the site owner could run it as a TOR hidden service and the Govt wouldn't be able to locate it to do anything. nothing stopping you the user from having multiple accounts. the cool thing about this is you don't need to trust the site long term, for optimum anonymity send money to the site, once its sufficiently confirmed you can spend it but use one user account per transaction. that seems safe to me, but i may have missed something.

[mouse]

well for starters, the site wouldn't need to know who you are, just that you have the right pass for the account and that the account has 10BTC in it. If the Govt wants to be dicks about it the site owner could run it as a TOR hidden service and the Govt wouldn't be able to locate it to do anything. nothing stopping you the user from having multiple accounts. the cool thing about this is you don't need to trust the site long term, for optimum anonymity send money to the site, once its sufficiently confirmed you can spend it but use one user account per transaction. that seems safe to me, but i may have missed something.

Its' unlikely merchants will be allowed to do this. If they are on a site that does require identification (more likely) then you need some way to pass the new databasecoin between the 'banks'. If you just use bitcoins to do this, you haven't achieved anything. If you don't, your gonna run into bigger problems (like how exactly does one bank trust another bank).

What anonymous currencies do is separate out the currency issuer from the users & merchants, and in the case of OT even from the 'banks' that hold and manage your accounts. This way, I can take the coin, issued by the 'currency issuer' and hold it myself. Or i can have it managed by my perferred 'bank'. Then I can pay the merchant, and the merchant can redeem it at the issuer, or exchange it for a new coin and spend it elsewhere. The issuer can not ever know that the coin from the merchant is the coin it gave to me earlier, so my privacy is protected, and the merchant can still authenticate me themselves according to their local jurisdiction and own privacy policy. Of course, you still then have to trust a central issuer not to run off with the vault of bitcoins. One way around this is to have a basket currency that holds currencies from multiple trusted issuers, but acts as its own single currency. By doing this you then spread your risk between as many issuers as go into the basket currency. Let's call it 'UnityCoin'. This is the approach that OT is taking. Actually FellowTraveller has said he has an idea to provably secure the bitcoins, but he hasn't yet revealed the mechanism. I can't wait to hear it.
What I’m curious to know, is if there is a way of having a distributed issuer that could never cheat, but doesn’t suffer the same problems with ‘slow’ transaction confirmations and no mincropayments like bitcoin. Remember, with these coin schemes, you can either manage the coins yourself, on your machine, and be truely anonymous, OR you can sign up to a 'bank' type service that can add services like ongoing payments, different/better security, etc. Either way, you still reap the benefit of instant confirmations.

nothing stopping you the user from having multiple accounts. the cool thing about this is you don't need to trust the site long term, for optimum anonymity send money to the site, once its sufficiently confirmed you can spend it but use one user account per transaction. that seems safe to me, but i may have missed something.

sounds like a lot of work - I  thought this was called easyCoin :-)

[becoin]

Due to this reversibility, people can purchase Bitcoins with their credit card due to the eliminated chargeback risk.

Bitcoins should never be purchased with credit cards or other method of credit. Bitcoin is cash and should be purchased with cash, or we risk transferring all weak spots of a fiat money system to bitcoin system! Cash against cash, this should be the leading principle for all bitcoin exchanges.

[haydent]

Due to this reversibility, people can purchase Bitcoins with their credit card due to the eliminated chargeback risk.

Bitcoins should never be purchased with credit cards or other method of credit. Bitcoin is cash and should be purchased with cash, or we risk transferring all weak spots of a fiat money system to bitcoin system! Cash against cash, this should be the leading principle for all bitcoin exchanges.

not really, as the money/wealth we can transfer from other systems into the btc system the stronger we get and the weaker they get.

i really like the idea, and no one said we where talking about actual bitcoin protocol development here !

its just an idea like the rest, and not that far out, and not compulsory, and you dont have to have nothing to do with it if you dont like it and cant stop it if you want to.

alot of you guys hating it are so stuck up in your ass that you have no idea about common folk. people who brought you into this world and looked after you and maybe know enough to check their email and do internet banking.

these people are not retarded because of this ! you are retarded if anyone for being so judgmental, negative and elitist.

[George Carmack]

EasyCoin's proposed solution:

All Bitcoins will be pegged to virtual credits in a database, like current payment processors. Trades will occur between accounts while actual Bitcoins are stored in sound, robust and offline storage. Transactions can be reversed in case of fraud or otherwise by a competent arbitrator.

Sounds good. Like the backing of the US$ to the Fort Knox gold reserves or the 1:1 backing of the Swiss Franc to gold.
The next step isn't far. Doubling the rate easycoin-bitcoin.. then 10x, then..
...breaking the connection...

BR
GC

[kloinko1n]

Sounds good. Like the backing of the US$ to the Fort Knox gold reserves ... [snip>

Hahaha! If the USD was backed with gold from Fort Knox (as if there's any gold in Fort Knox), there wouldn't be so many dollar bank notes.
What a joke: backed with gold from Fort Knox... 

[phillipsjk]

Look, let's be honest. This is a direct competitor to Bitcoin. Easycoin is a currency; it front-ends Bitcoin as a currency and therefore will be perceived as a currency and therefore will be a currency. What is a currency if not perception? And Easycoin would not be a "sub"-currency in the sense that the term is misleading. If anything, it's an "over"-currency because it sits OVER Bitcoin.

If Easycoin runs to its logical conclusion, Bitcoin will become a cul-de-sac for everyone but the underworld and digi-techies (heck, we already have them)...with Easycoin being the central bank access road.  

The window for Bitcoin to emerge into ITS OWN with the online mass market is now.

PayPal does not require you to have a PayPal account to pay a merchant using PayPal's services: all you need is a credit card. If Easy coin really is just a payment processor, you would not need an EasyCoin account to pay somebody using Easycoin: just send them Bitcoin to the address generated for that transaction.

[becoin]

Due to this reversibility, people can purchase Bitcoins with their credit card due to the eliminated chargeback risk.

Bitcoins should never be purchased with credit cards or other method of credit. Bitcoin is cash and should be purchased with cash, or we risk transferring all weak spots of a fiat money system to bitcoin system! Cash against cash, this should be the leading principle for all bitcoin exchanges.

not really, as the money/wealth we can transfer from other systems into the btc system the stronger we get and the weaker they get.

You can't transfer money/wealth from a credit card. Credit card is debt. Transferring money from a credit card is just transferring debt. And debt is not wealth, it is just debt!

[George Carmack]

Sounds good. Like the backing of the US$ to the Fort Knox gold reserves ... [snip>

Hahaha! If the USD was backed with gold from Fort Knox (as if there's any gold in Fort Knox), there wouldn't be so many dollar bank notes.
What a joke: backed with gold from Fort Knox... 

Not a joke, just a little history. Back in 1900 the Dollar was backed with 1,504632 gr gold and the Swiss Franc until 1973

BR
GC

[Man From The Future]

(stupidity here )

[sunyag]

If Easycoin runs to its logical conclusion, Bitcoin will become a cul-de-sac for everyone except the underworld and digi-techies (heck, we already have them)...with Easycoin being the central bank access road.  

The window for Bitcoin to emerge into ITS OWN with the online mass market is now.

PayPal does not require you to have a PayPal account to pay a merchant using PayPal's services: all you need is a credit card. If Easy coin really is just a payment processor, you would not need an EasyCoin account to pay somebody using Easycoin: just send them Bitcoin to the address generated for that transaction.

Easycoin, as I understand it, is not 'just a payment processor'. It is effectively a bank which issues its own form of tradable credits "backed" by Bitcoins.

And at what point do the "Easycoin virtual credits" become a currency of their own? I suggest, immediately (though not immediately touted as such).

And at what point do those Virtual Credits cease to require the "backing" of Bitcoins? Well, that will be a function, over time, of the strength of Easycoin's market share and the strength of its brand name.

But make no mistake, once the thing is moving, the brand that will be pushed will be Easycoin, not Bitcoin. And people's perception, belief, in Easycoin Credits will become THE ingredient.

At the juncture where Easycoin realizes it doesn't need Bitcoin, it can work on its own blockchain which will bend wholly to the needs of Easycoin Credits. Or Easycoin can even bail on any "backing" at all (history repeats). It's all about perception.

Whoever captures the interface, captures the market. And whoever captures the market, defines the currency.

People do not care about 'monetary values'. They just don't. They say they do. But what people want is 'easy' and 'now'. Easycoin knows that and Easycoin wants to give it to them. But then what? Easycoin will have the market - not Bitcoin.

And at the point when Easycoin CAN exploit the system, Easycoin WILL exploit the system. Not because Atlas, or anyone with Easycoin, is bad - but because they are normal.

We need Bitcoin interfaces. Fast.
 

[Serge]

Easier said than done. Good luck!

[becoin]

Easycoin, as I understand it, is not 'just a payment processor'. It is effectively a bank which issues its own form of tradable credits "backed" by Bitcoins.

As I understand it, OP's idea is to sell insurance policies on bitcoin transfers to merchants that want to accept bitcoins from accidental customers. So far so good. It is an old business concept and it might be reasonable. What I do not understand is what insecure aspect of bitcoin transfers Atlas wants to cover?

[FlipPro]

Easycoin, as I understand it, is not 'just a payment processor'. It is effectively a bank which issues its own form of tradable credits "backed" by Bitcoins.

As I understand it, OP's idea is to sell insurance policies on bitcoin transfers to merchants that want to accept bitcoins from accidental customers. So far so good. It is an old business concept and it might be reasonable. What I do not understand is what insecure aspect of bitcoin transfers Atlas wants to cover?

I think he just wants to stream line, and noobify the hell out of Bitcoins, which is fine by me. If Bitcoins are simply to hard for the masses to understand, maybe Atlas can explain it to them by putting his own ass on the line with Easycoin. Either way we're winning! Good luck to you Atlas, just make sure you pay your taxes  .