This idea is very much in draft, so for those of you that want only the bare bones and to the point, skip to the underlined and bolded sections for the bottom line. But if you want to know how I arrived at these ideas, feel free to surmount my wall of text and plant a flag on top of the mountain when you are done. But if you have some good points or inspire me in some way, or know of a place where this has already been discussed, I will modify this post to reflect your points. This post is very much a living document, so to speak.
So here we go:
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One of the problems with centralized currencies, whether they be centralized government currencies or centralized "private sector organization" currencies (eg E-gold, WoW gold, Ripples, etc) is that if the "trusted" center goes corrupt or gets taken down by an adversary group, then the whole economy based on the centralized currency is basically fucked. If the Federal Reserve makes a fatal mistake, it's you and I that pay the price. Bitcoin, or any currency like it, is starting the move human kind away from such a highly centralized method of currency management to a somewhat centralized oligarchical system of of currency management via "pools". And one of the genius aspects of the Bitcoin and Namecoin protocals is that it REWARDS and financially compensates people for providing the infrastructure backbone necessary for its existence, and this reward would be issued in a currency unique to the protocol itself. Most importantly however, and this is an Achilles heel not only for governments but base level human nature as well, the bitcoin and namecoin protocals denied its greatest opponents a single, identifiable TARGET!! Just...like...bit...torrent!!
A face can be struck. A leader can be killed. A company can go bankrupt. A server can be confiscated. A website can be shut down by coercing a domain host provider to hand over control of the offending domain. And a government or agency can be infiltrated and coopted. But how do you obliterate persistent software backed by even a tiny community that can span the globe? It only takes two computers in the entire world to sufficiently run the entire bitcoin network without issues.
But now that the new truly unique and secure currencies of the internet, crypto currency, can be decentralized thanks to the genius of Nakamoto Satoshi, we need to ask ourselves, "what else can we decentralize to a manageable enough level to keep the accepted 'tribal leader(s)' honest but able to keep the community from losing its way?" How can we create MORE institutions and communities like Wikipedia, Reddit, Torrents, and Bitcoin where you have the appearance of a leaderless society, but in reality still has socially influential and socially connected elites such as Developers, website operators, high volume content creators and other highly active hard core members with just enough influence to make it all work for the good of all?
My proposal is that we apply the principles of Bit-Torrent, Bitcoin and Namecoin to the crypto exchanges themselves.So what do I mean by this? Well let me explain and please bear with me and follow my train of thought.
Decentralized, server-less exchanges are not a new idea, and I've seen at least a few ideas and projects spring up. However, what I have yet to see is a system whereby everyone keeps the coins on their own system and are able to offer up their own prices on a software client market that works like a stock market. But who runs the servers necessary to make the client work at all? At the moment, with crypto exchanges, only one person or named entity (Mt Gox, Crypsy, etc), operates all the (website) server hardware and software to make the trading platform work. And because these entities and people operate and own all the server hardware and software to make the platform work, anyone who uses the platform is subject to what's known on Wall Street as "counter party risk". In the wall street world, this risk is for the most part non-existent because of the FDIC and other government policies meant to maintain the status quo. But in the crypto world, this is the 1880-1914 era all over again, where bank failures and 100% loss of deposits and bank robberies were not unheard of. These "named entities" can mature, but they are a centralized point of failure that we depend too much on, esp when there are more robust methods we can turn to given the necessary developer and designer talent necessary to make it all work.
What we need, and what I challenge everyone running decentralized exchange projects to do, is to help come up with an exchange market system with these key features:
1) Exchange transaction fees shared between everyone who provides the computer resources, divided up according to how much resources they were able to provide, and
2) Every exchange that occurs between coins on the market place is recorded on a block chain unique to the client itself and shared between every node. BOTTOM LINE: I'm talking about a decentralized software exchange (as opposed to a centralized server-based website exchange like Crypsy or Mt.Gox), whereby YOU can get paid a small portion of transaction fees in ONLY the coins where you have a local wallet software (the more wallets and coins you have, the more diverse the fees you can collect) if you devote bandwidth and computer resources necessary for the proper functioning of the exchange!! This idea is a work in progress, so please leave feedback, and if your comment or feedback is good enough I may modify the original post.
Sadly I have no programming skills, so I cannot make this happen by itself, but I feel that I might have a good vision of how this idea can come to fruition, given the right team comes together and we make it happen.
