Looking for reputable board members (not funders) for distributed exchange!

[darkmatter7]

I am taking the first step toward crowd-funding my distributed alt-coin exchange project (before you jump to conclusions, keep in mind that this is not a full disclosure of the project.  It's project which is unique from other proposed exchanges).  Instead of directing fundraising to a personal address, I will be finding reputable members of this community to act as board members.  When an initial funding round begins, funders will send coins to a board member of their choosing's address.  These board members will serve the purpose of holding myself, and other co-founders of this project accountable by serving as escrow agents for the first round of funding.  They will dispense funds on a per-need basis for the project, or if it comes to it and the project folds, will return the remaining coins to the funders.

Please PM me if you are interested in being considered for a board member position.  I will provide technical information pertaining to the project, my executive summary, and my longer business plan.  Let me emphasize that Board Members are NOT funders.  They will be escrow agents directing the funds.  If at the point when initial seed funding begins, a board member chooses to fund the project, that is a separate decision.

Ideally, a board member applicant should have:
- High post count and activity within the community
- Shown positive contributions to Bitcoin or Altcoins
- A history of productive internet behavior (is not a troll)

Prospects will essentially go through a dual interviewing process in which you interview me, deciding if you're interested in the project, and I interview you, deciding if you're an ideal candidate for this role.

Some background on my motivation:

I've just gotten home from a trip to the bay area meeting with angel investors and vc's for a distributed altcoin exchange that I've been working on for the past month and a half.  I secured a tech partnership, and am waiting to hear from an angel investor.  Overall, it was a very productive trip, however, I was amazed at the ignorance toward bitcoin and alt-coin among some of the older tech elite in the area.  I walked into meetings expecting investors to have some prior knowledge of the bitcoin protocol, and its potential, but was amazed when meetings turned away from the details of my project and toward "why is there a need for an exchange?".  When I began trying to explain more advanced concepts like transaction scripting and smart contracts, I actually saw VC members become visibly annoyed, with comments like "virtual stock in a company, you're kidding..."

So driving home from my trip, I decided to make a shift from looking for traditional angel and vc funding, to preferring crowd funding.  This forum understands the potential of Bitcoin and Altcoins as a transaction protocol and building block for smart contracts, as well as the need for a truly decentralized exchange.

This is as much public information as I will disclose for now about the project details.  Feel free to PM me, whether as a potential board member, developer, or just an interested community member, and I will give more details pertaining to the project.

This thread should be used only to discuss potential board members, and the process through which I am proposing to fundraise.

[HairyMaclairy]

How about you write a white paper explaining in detail how you are going to solve the obvious problems, show us the math, and then ask for cash.  Until then it's just another Mastercoin, Quark, vapourware project.

[darkmatter7]

I am absolutely not asking for cash at this stage.

I have done the math, I have written the technical paper, and I have written the business plan.  Those documents will absolutely be publicly disclosed prior to me asking for funding. 

Right now, I am only looking for reputable community members to offer to essentially act as escrow agents who will dispense funds raised on a per need basis to keep the project accountable and the funders protected.  I am doing this prior to asking for funding to avoid a Mastercoin type fiasco! 

[HairyMaclairy]

Yes but you will be asking for cash next week.  Show more than arm waving.

No one trusts "trusted members of the community".  They can't come into your house and force you to write code to solve problems that don't have answers yet.

JR is dumping his personal stash of MSC as we speak.

[darkmatter7]

Take your mastercoin anger out on mastercoin.

This isn't a scam, this is a response to previous scams.

If you're going to criticize, wait until I've asked for money. And by all means, PM me as soon as you want and we can set up a Skype conference and I will share documents with you.

[coinrevo]

There some good elements to this plan. Its interesting, but you already claim ownership for yourself. This is the typical behaviour of a business owner, not a member of a collective community. what is needed are better proof of stake protocols. yes, founders and developers can have a bigger share, but they have to distribute control. this isn't about forming corporate structures where a board has total control, where a few people get rich, and the others get pocket change.

Re: Silicon Valley. Yes, they don't get it. cryptocurrencies is a much larger phenomenon with a global impact, instead of producing a few US billionaires. most of silicon valley is really in the advertising and data mining business. and they are of course die hard capitalists who don't see anything wrong with 5 people making all the decisions for the future of information technology, collaborating with the NSA, etc.

This forum understands the potential of Bitcoin and Altcoins as a transaction protocol and building block for smart contracts, as well as the need for a truly decentralized exchange.

Well, there is no progress on that front. Frankly having worked in the area of market microstructure for 10 years, people don't have much of a clue. Exchanges and blockchain only go well together in certain types of markets. Building something which is open and integrates with a wider community is a very good idea. Your board member idea is nice, but I personally think bitcointalk isn't a good platform at all. Think about it - bitcointalk is a centralized system which has been hacked several times, build on 10 year old tech. I strongly believe the next generation should be build on a central service, i.e. a messageboard which has crowdfunding and decision making into the platform itself. bitcointalk is partly evolving into a den of fraud, and doesn't have much safe guards. for example say there is a new messageboard with 20 "trusted" members. they then say which alt-coins make sense and which not (which is your plan here), and influence decision making. but they have to be accountable in some way. its a kind of mix with proof of stake.

what you are proposing is that decision making should be private and the ownership of the platform private. thats not good, as indicated by the mastershares comment. that is one of the many problems with bitshares/mastershares. totally opaque and obscure. also DAC's don't make much sense as they are structure currently. anyone with a business can move his income elsewhere very easily.

[Sukrim]

I am not even sure if I'd trust myself with serious amounts of BTC, why should others do that? Because I write/read a lot in this forum, read Bitcoin and Ripple sources and do a few small projects on the side?

Also, what's the benefit for your escrowers? A percentage of funds? A fee? The chance to check out your ideas first hand?

[coinrevo]

Yeah, if the numbers gets large the game changes. Sure, I would trust a well known bitcoin community member with 1000$. But 1M$? essentially this is proof of stake. its an interesting idea to combine fundraising through "a community", which is the idea here. I hope this concept evolves and will be improved. problem is that those who develop and make decisions want part of the stake, because its a lot of work. I can't see how in this model developers take their orders from the board members, if they have no skin in the game. they could be corrupted one way or the other. I mean the two most senior bitcoin developers are engaged in a kind of soft corruption, singing up as advisors to corporations. its not quite the same as getting money for changing in the source, but its not exactly in the spirit either. They have been working on bitcoin for free, so fair enough.

a cryptocurrency depends much more on trust of the developers than initially thought. for example with bitshares its obvious that stakeholders can be diluted quickly. if its opensource it can be forked and the value of the stake goes to 0. there is no network effect in the stake. as far as I can tell these DAC/exchange type currencies are a disaster, but not because they are "a scam", but the model does not work. DAC and exchange are also quite different concpets. None of this is proven to work.

[darkmatter7]

I agree with what all of you are saying.

Just view this as an initial step where I'm saying, hey, you guys should not trust me, look what has happened in the past when funds were raised without accountability.

I wanted to open the discussion to finding a better way to do this, that's all.  I'll discuss details of the project when the time comes, but for now let's just discuss what might be a good way to do this!  It doesn't have to be directed at my project in particular.  It would be useful for us as a community to begin discussing how to raise funding for virtual corporations in a more secure way that can keep founders more accountable.  I am not proposing a set method for doing this, just initiating the conversation.

[coinrevo]

Glad to see someone is thinking along these lines - how to improve community trust models and mechanisms.

I believe a practical step would to have a next generation communication platform - a message board with voting and crowdfunding capabilities. Something like a mix of bitcointalk, github, kickstarter and angelList. You start off with a core team building some software. Then they bring in more people who get stakes for contributions of various kinds. At least some new experimentation with this would be very valuable. One simple example: if the threads in the project section of this forum would be sorted by projects and their funding, one could have a better overview over all the activities. one could then sort by location and say find a project nearby. one can think of much better trust models, funding contracts, PGP, WoT etc backed into such a platform.

In terms of DAC's I think the problem is that income streams can always be moved elsewhere. You need really a structure where the income stream is tied to a server itself. Not every corporation can be virtual. There hasn't been really that much advancement on this (I don't think bitshares  shows how it could be done even in principle, and it has nothing to do with Turing complete languages). The above mentioned approach can be implemented today. Its not perfectly secure, as it is centralized, but it would be a start.

[Sukrim]

I wanted to open the discussion to finding a better way to do this, that's all.

How about answering my questions then? They were not rhetorical.

[darkmatter7]

I am not even sure if I'd trust myself with serious amounts of BTC, why should others do that? Because I write/read a lot in this forum, read Bitcoin and Ripple sources and do a few small projects on the side?

Also, what's the benefit for your escrowers? A percentage of funds? A fee? The chance to check out your ideas first hand?

Benefit of escrowers:
I would propose that escrowers would receive a fractional piece of equity, essential as payment for their services in this case.

Trust:
You're right, this is an issue, and you have valid concerns.  I'm not stating that this is a perfect solution.  I'm merely saying that this is a possible step toward a better funding process than sending funding directly to the fundraiser (me in this case).

I am essentially proposing a 3-step escrower/board member admission process.  The first step is a community member expressing interest, the second would be a forum poll, choosing 5-10 escrowers from a pool of applicants.  The third step is entirely funder decided.  Once we have chosen these escrowers, you as a funder would be able to choose which of them to send your funds to.  You could choose the escrower whom you trust most, or feel is most knowledgable about the topic.  Because they control the purse, they would be your representative toward guiding the project.

Another note regarding trust of the escrowers is the possibility of doing this through a series of multisig addresses.  I will work out and propose a scheme using multisig addresses and m of n transactions to allow for the funders and the escrowers to have a maximal level of control over how their funds are used.

[Sukrim]

Hm, I personally am not really a fan of these things ("community driven/financed" stuff), I'd rather see someone do it either out of intrinsic motivation (e.g. Satoshi) or because they want to build a product and develop a way to transparently profit on the way (e.g. Ripple) instead of pulling people from here into the project.

I for example find decentralized exchanges and the concepts behind them quite interesting, but I wouldn't want to be too deeply involved in any of them or seen as advocating them by being a board member. Just take a look at what NXT did with their "initial investors" and the shitstorm it created or what Mastercoin did.

Good luck with that idea and hopefully everything works out as you want it to - I'd recommend to centralize funding etc. around yourself and a team of people you motivated to work with you though. First the team, then the money.

[coinrevo]

Up to now, there is only bad precedents: Mastercoin, NXT, bitshares. bitshares is a project sponsored by a US company. of course they have incentive to not be honest, because there is no intermediary stopping them. this is a bad model, and repeating itself with etherum. fundraisers are bad, and outside investment (Ripple) is bad.

I will work out and propose a scheme using multisig addresses and m of n transactions to allow for the funders and the escrowers to have a maximal level of control over how their funds are used.

It will be impossible to make that work in my opinion. board members can be easily to bought to shift to one plan or the other.

Solving these issues will be very hard. I indicated above what I believe would part of the solution: a bitcointalk 2.0  should evolve to allow for support for such projects.

[spndr7]

I have thought on similar lines,this just needs code implementation.

First posted at https://bitcointalk.org/index.php?topic=112222



Order opening,closing and modification
A block-chain is maintained which keeps all valid open orders.A node requesting to open an order sends order quote to the network.The network verifies the order by periodically querying the corresponding blockchain and check that order is sent by the node is less than its
balance or not.In this way fake orders could be weeded out.A node can modify or cancel the order by querying the network with message signed with its private keys.

Orders open could be accessed by all nodes.Any node interested could send request for accepting an order.After similar verification about buyer's balance the order status is changed to accepted.

Money Allocation to intermediate nodes
Once order is accepted,the network divides the money to the other nodes such that,the money send to any node is less than the trade amount,that node wants to execute.This trade assignment is sent to both trading parties.They are required to send money to assigned intermediate nodes.These transactions are verified by the network.

Intermediate transaction
After all intermediate transactions are over,the network sends the address of buyer and seller to the nodes which received money from seller and buyer receptively. Until they successfully execute their routing assignment,their trade money is not released from their intermediates.

The intermediate node is the random third party node assigned by the network,which handles the trust problem.This assignment is random by the p2p network.There will be a very little chance that some one assigns his own trading router, if the number of nodes participating in it is sufficiently large.

Once the transaction from the buyer/sellers to intermediate nodes is verified,the network assigns the intermediate nodes, the address of the party (at opposite end of trade) to transfer the money to that end.

Until the intermediate nodes transfer the money,their own trade is locked.At all levels,all the transaction related to an order are securely stored in blockchain,using method similar to bitcoin (SHA-1 or other hash function),to avoid tampering to an open order.

Assumptions
1. To start the trading, first two nodes should be assumed that they conducted their routing operation.
 
Advantages
1.Buyer and seller don't know each other until trade is successfully conducted.
2.Using a block-chain,all trading activities can be recorded securely so that trade is not tampered until its over.  

Possible Drawbacks
1.Tackling of the closed loop deadlock problem.
2.Random trade route assignment function has to be thoroughly tested,before implementation.