Oopps, I missed some action in this thread.
LETS and other local currency systems work perfectly well, there's more than 4000 local currencies in operation. It's interesting to note that many complementary currencies advocates often say exactly the same you said about LETS, but about Bitcoin: "Bitcoin deflects attention away from social currencies and other real alternatives."
Goldbugs, greenbackers, "local currency hippies", gesellians, bitcoiners, trade clubs, etc are all on the same boat, we're all monetary reformists that recognize that that out monetary system is the root of most evils. Even if we have different opinions on what's exactly is wrong with the current system.
We should try to understand each other better and fight together against the banking cartel, usd, eur, etc instead of fighting each other.
We bitcoiners are just the last faction of a much bigger movement.
All local currencies, time banks and "barter" clubs combined have far more users than Bitcoin.
It would be huge for Bitcoin to integrate with those trade networks.
OT is useless for many use cases because you can't even trade two assets in two different servers atomically.
Ripple.com has a lot to do with this proposal, replacing proof of work with their new consensus mechanism. I don't know if that will work, but it's worth trying.
It is currently free software although the network is not p2p yet.
I think it has several design flaws though, and it doesn't look like their developers want to fix them.
For me Freimarkets
is the continuation of this proposal.
I also wanted to integrate this proposal with Ryan's Two phase commit ripple distributed protocol and "private chains" are the way we decided to do that.
Well, not exactly with Ryan's design, but we also use the two phase commit and support more scalable and private off-chain transactions.
Some advantages over Ripple(tm):
- Support for off-chain assets/transactions.
- Support for interest bearing assets.
- Open orders (and trust lines, which in this case are emulated using regular orders) are off-chain.
- More scalable KYC support (and more flexible for some local currencies related special needs).
- Compatible with Bitcoin's design, code and scripting language (it's just an extension).
- Unspent outputs instead of accounts (no sequencing, better privacy).
- Although miners are likely to prefer the hostcoin, fees can be paid in any asset type.
- Support for unique non-fungible assets (better for some smart property use cases).
- Auctions, options...
Currently I'm busy finishing Freicoin Foundation's website, maaku is busy with the "ultimate UTXO compression" implementation
and we're both busy building a crypto-currency business together.
In addition we haven't received much funding for this yet and we would also appreciate more feedback from core bitcoin developers that have also thought about smart property and off-chain transactions.
Anyone interested in seeing this happen please review the design and/or fund the development.
We cannot promise you to get rich like mastercoin or bitshares, or any return in your donation at all, but we think this would open the door to many entrepreneurship opportunities.