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Rassah
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March 12, 2012, 01:52:43 AM
 #81



And how will irreversible BitUSD exchange from reversible USD?

That doesn't ever need to happen for the system to work. Bitcoin can be exchanged for reversible USD at MtGox or other exchanges as necessary. This is all the integration necessary and it is already in place.

I guess you missed the whole purpose of the OP and this thread, which is that with centralized exchanges, this currency becomes an easy target for government laws and scammers. Look at Tradehill and all the issues MtGox has with keeping a bank account open.
Unless your proposed solution is to have BitUSD created and controlled by the government, thus being fully endorsed and legal... but in that case, why even bother, instead of just making ACH transfers irreversible? It's kinda funny how you keep making it sound as if you think everyone else is an idiot.  Roll Eyes

Well, of course there needs to be some exchange between actual USD and bitcoin somewhere. The point is that it doesn't need to bear the kind of volume MtGox bears. It could just be a trickle and the vast majority of exchanges could be carried out with bitUSD. In the worst case scenario, it could be isolated  exchanges of BTC for cash. This could co-exist with a deep, liquid market for bitUSD - bitcoin which is unconnected to the banking system.

And yes, you are an idiot.


Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible BitUSD you can trade for Bitcoin.

Do yo propose to just give out BitUSD to EVERYONE who wants to some day buy Bitcoin? Please explain what Step 2 is, because if that step is solved, I don't see why you can't just have

Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible Bitcoin

Please let me know if you are misunderstanding something, because I have been asking for you to explain this Step 2, this exchange from reversible to irreversible ANYTHING, this step 0 in the chain of 1, 2, 3, 4, 5, this entire time and all you've been giving me is Steps 3 and up, and calling me an idiot because you forgot about Step 2.

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March 12, 2012, 04:54:46 AM
 #82

Almost all exchange volume is related to speculative or hedging purchases by people who regularly move between USD and bitcoin.  My idea addresses this use (but not for HFTs).  I don't have a solution for using VISA cards or bank accounts to buy bitcoin with out facing a reversibility problems. However, not much stuff is sold only for bitcoin, so there isn't much need for this. People can just use USD to purchase things.

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LiteBit
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March 13, 2012, 02:58:09 PM
 #83

Project page is updated:
https://litebit.co/project-item/p2px/

markm
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March 13, 2012, 05:56:21 PM
 #84

Hedging is doubtless a market, and it really need not have anything to do with actual fiat<->cryptocoin exchanges.

Just like one of the bitcoin<->USD conversion rate options sites resolves all balances only in bitcoins, hedging can also balance / strike only in bitcoins. All the people hedging need is a way to denominate their holdings in terms of a fiat unit of count during periods then they think the fiat unit of account will lose less actual buying power / value than the cryptocoin unit of account will.

It is merely about relative "value" of unit of account. Actually acquiring fiat upon eventually cashing out is totally independent of that.

So far the primary barrier really to doing this as blockchains has been the evident unwillingness of people doing merged mining to merged mine more chains, resulting in merged-mined chains having insufficient security so far to be suitable for this use.

Maybe we should right off the bat distinguish between fiat currency exchanges, cryptocoin exchanges and fiat<->cryptocoin exchanges, as they are maybe three different problems, albeit the first (fiat<->fiat) and third (fiat<->cryptocoins) might be somewhat similar in terms of the regulatory problems they might encounter (though still the third might have more or different regulatory problems in some details from the first).

Since the USD is not the only fiat in the world, and in fact some nations might even prefer that it not even be used as global reserve currency at some point going forward, the whole concept of allowing each Freeciv nation to issue their own blockchain-based currency was intended partly to actually get in place blockchains that could, once sufficiently secured, be used for this hedging type of use even if not directly convertible to fiat. I figured the whole problem of conversion of fiat can be left to bitcoin itself, allowing all other cryptocoins to get on with their own problems internalt to the cryptocoin world. If exchange to and from fiat does turn out to be a massive market, then bitcoin's position as the primary conduit for such exchanges should help keep bitcoin its current place as the pre-eminent cryptocoin. If however such exchange turns out to be a dwindling market as more and more business takes place purely within the cryptocoin world then who knows, maybe bitcoin will find being the main gateway will slowly lose its importance in the cryptocoin economy.

-MarkM-

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March 14, 2012, 08:14:22 AM
 #85

@Rassah

1) Having "fiatcoins" is a great advantage over centralized markets the way they're now:
The server can know all your trades and balances, get hacked exposing that data, etc...
There's many advantages that bitcoin has over bank balances apart from having a fixed monetary supply.
You still have to trust mtgox  (or whatever) as the issuer. As the ones that hold your fiat. You still have to pay them the fiat through regular banks unless they accept cash, ripple credits or something else, but the irreversible fiat would still be very useful.

2) With Ripple you can pay for bitcoins if there's a trust path between you and the seller.
In the same way, you can sell fiat for ripple credits and viceversa.
Making atomic trades between bitcoin and ripple would be great.
Feel free to ask anything about ripple.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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March 14, 2012, 10:14:23 AM
 #86


Where is the "trader bot" running?

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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March 14, 2012, 05:32:03 PM
 #87

Some clients have been leaning toward Torchat as a transport mechanism, or as sample code for how to set up connections. Apparently Tor itself normally only takes about three hops to connect to stuff, whereas with Torchat both parties reach out three ore more hops to set up rendez-vous. If that actually does provide better security maybe it is worth looking into.

There are gosh knows how many chatbots floating around so maybe one could be adapted to do a ripple type credit system on a friend to friend basis. I do not know whether ripple's basic concept - that friends can be trusted to settle up in a reasonable timeframe - actually works, but if it does it seems better to set it up on an actual friend-to-friend basis than to have "servers" per se.

I actually already suggested earlier that maybe if you aren't in a hurry you might be able to "exchange" simply by offering a higher exchange rate for the currency you want and a lower rate for the one you are trying to "sell", and basically all be running friend to friend trading-bots. Your friends' bots will notice you have raised your offers for the currency you want, and presumably "arbitrage" it with their friends and so on. Of course if each hop involved fees that might stifle exchange a lot over multiple hops...

-MarkM-

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March 14, 2012, 05:35:38 PM
 #88

Then you should give a look at Jtorchat
It's the Java client with the same protocol Smiley

Eternity Wall: Messages lasting forever - The Rock Trading (ref): A good exchange / gateway Ripple, with support for multisig, since 2007. 
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Gerald Davis


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March 14, 2012, 05:52:02 PM
 #89


Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible BitUSD you can trade for Bitcoin.

I don't see why you can't just have

Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible Bitcoin


The difference between the two is obvious.  In the former the value of your digital holdings is tied to value of USD.  The value of your holdings in the later is independent of USD.
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March 14, 2012, 06:41:12 PM
 #90


Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible BitUSD you can trade for Bitcoin.

I don't see why you can't just have

Step 1 - Get fiat USD
Step 2 - Huh
Step 3 - Have irreversible Bitcoin


The difference between the two is obvious.  In the former the value of your digital holdings is tied to value of USD.  The value of your holdings in the later is independent of USD.

I was questioning the difference in the act of exchange. Regardless of the value, I can buy BitUSD at 1:1 ratio, transfer BitUSD to my wallet, then do a charge back to get my original USD back. The only difference between this and Bitcoin is I have stolen $1 worth of BitUSD instead of $5 worth of Bitcoin. I.e. reversible to irreversible exchange can not be solved by calling Bitcoin by another name, or by pegging its value. So I was wondering why cunicula kept pushing it.

markm
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March 14, 2012, 07:05:27 PM
 #91

I was questioning the difference in the act of exchange. Regardless of the value, I can buy BitUSD at 1:1 ratio, transfer BitUSD to my wallet, then do a charge back to get my original USD back. The only difference between this and Bitcoin is I have stolen $1 worth of BitUSD instead of $5 worth of Bitcoin. I.e. reversible to irreversible exchange can not be solved by calling Bitcoin by another name, or by pegging its value. So I was wondering why cunicula kept pushing it.

Okay, here is a scenario for you.

You ask around your dorm to see if anyone has any cryptocoins for sale so you can try them out.

One guy says "sure, I can sell you bitcoins, only $30 each, grab them while they're cheap, they'll be $100 each by Christmas".

Another guy says "sure, I can sell you DigiBucks, only a buck each, they're just a digital token representing bucks".

You buy $30 worth of each, try them out. You decide the stupid clients are too complicated, the offline wallet abilities are too complicated, the whole darn thing is too complicated. You really try mind you, heck you try all summer and fall.

Finally it is time to go home for Christmas. You tell both buddies you tried your best but cryptocoins are not for you, so you want your money back.

One of them says "are you crazy, have you looked at the price lately? That bitcoin is worth no-where near what you paid for it, no way I am giving you your money back, I got Christmas presents to buy."

The other says "no problem, how many you wanna sell me? Oh 30 was it? No prob, send them to this address. Thanks. Here's thirty bucks. Have a merry Christmas and a happy new year."

-MarkM-

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Gerald Davis


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March 14, 2012, 07:09:02 PM
 #92

I was questioning the difference in the act of exchange. Regardless of the value, I can buy BitUSD at 1:1 ratio, transfer BitUSD to my wallet, then do a charge back to get my original USD back. The only difference between this and Bitcoin is I have stolen $1 worth of BitUSD instead of $5 worth of Bitcoin. I.e. reversible to irreversible exchange can not be solved by calling Bitcoin by another name, or by pegging its value. So I was wondering why cunicula kept pushing it.

I think you are still missing it.

It is IRREVERSIBLE DOLLARS.  The same irreversibly, decentralized, and peer to peer aspects of Bitcoin but for a "semi-stable" dollar equivalent crypto-coin.

He is pointing out the irreversibility not because it is somehow superior to Bitcoin or that you would need it to get Bitcoins but it is superior than Paypal, credit cards, ACH, checks, etc.
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March 14, 2012, 09:48:59 PM
 #93

I was questioning the difference in the act of exchange. Regardless of the value, I can buy BitUSD at 1:1 ratio, transfer BitUSD to my wallet, then do a charge back to get my original USD back. The only difference between this and Bitcoin is I have stolen $1 worth of BitUSD instead of $5 worth of Bitcoin. I.e. reversible to irreversible exchange can not be solved by calling Bitcoin by another name, or by pegging its value. So I was wondering why cunicula kept pushing it.

I think you are still missing it.

It is IRREVERSIBLE DOLLARS.  The same irreversibly, decentralized, and peer to peer aspects of Bitcoin but for a "semi-stable" dollar equivalent crypto-coin.

He is pointing out the irreversibility not because it is somehow superior to Bitcoin or that you would need it to get Bitcoins but it is superior than Paypal, credit cards, ACH, checks, etc.

I am apparently still missing it, because the thread topic is on a P2P exchange, with the premise that Fiat <-> Cryptocoin centralized exchanges are vulnerable and bad, and he brought up the idea to bypass those exchanges using cryptoUSD. If his whole point was "this currency backed by... something... and maintaining dollar parity is more stable and useful," then he's post is totally off-topic. If his point was that a stable BitUSD will make exchanging into Bitcoin easier, then I just don't get it.
Regarding borrowing $30 for Christmas example, frankly, based on how pegged currencies have performed historically, I'd take my chances with floating feat Tongue But that's a totally different topic.

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March 14, 2012, 11:20:18 PM
 #94

I guess friend to friend is different from peer to peer, since peer to peer seems to mean neither person trusts the other.

It still seems most likely that the problem of converting reversible to non-reversible will be best handled on a friend to friend level.

Once you have irreversible currency of any denomination, converting to bitcoins is suddenly a whole lot easier.

I doubt if you can avoid some degree of centralisation, for example if you use some kind of web of trust it is likely that some people will emerge as more trusted than others. That is a degree of centralisation as they become more and more central the more their trust score outweighs others'.

How do you propose to secure an exchange with no trust without having both currencies being exchanged be blockchain based? Even if some kind of "smart property" is one side of an exchange can you really be sure the "smart property" has not been tampered with or will not be tampered with by the time you take delivery of it? Most likely the proof of ownership used for its smartness will be a blockchain?

-MarkM-

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Gerald Davis


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March 14, 2012, 11:40:35 PM
 #95

How do you propose to secure an exchange with no trust without having both currencies being exchanged be blockchain based?

Isn't the obvious solution to have both currencies blockchain based?
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March 15, 2012, 12:22:31 AM
 #96

How do you propose to secure an exchange with no trust without having both currencies being exchanged be blockchain based?

Isn't the obvious solution to have both currencies blockchain based?

This comes right back to my original point that our main, used by most, currency is NOT blockchain based. Exchanging blockchain to blockchain is very trivial. Exchanging what most people use into blockchain is the holy grail of exchanges.

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March 15, 2012, 12:43:36 AM
 #97

How do you propose to secure an exchange with no trust without having both currencies being exchanged be blockchain based?

Isn't the obvious solution to have both currencies blockchain based?

This comes right back to my original point that our main, used by most, currency is NOT blockchain based. Exchanging blockchain to blockchain is very trivial. Exchanging what most people use into blockchain is the holy grail of exchanges.

And not letting it happen without surveillance is a holy grail of despots, fascists, etc... oppressive/repressive governments/thugs in general.

Every over the radar / over the counter purportedly irreversible fiat-outlet other than person to person physical cash ends up reneging, basically.

DId Liberty Reserve renege yet? How about Pecunix? Egold tried not to and look where that got them.

So unless you want to mail paper money in unmarked envelopes or meet strangers in bars/cafes/alleys for hand to hand transfers friend to friend looks a pretty likely method of initially getting irreversible currency.

Maybe one could also consider saying outright heck I don't want your stupid fiat, how about accepting some of my cryptocoins instead of currency for whatever it is you do that people give you the fiat for in the first place...

...Which, if it turns out not worth buying, maybe just says even more about the fiat world: it pays people to do crap that shouldn't be done in the first place...

Okay that was uncalled for. What I mean is, don't come to me looking for bitcoins, ask your frickin' employer to pay you them.

-MarkM-

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March 15, 2012, 06:11:12 PM
 #98

How do you propose to secure an exchange with no trust without having both currencies being exchanged be blockchain based?

Isn't the obvious solution to have both currencies blockchain based?

This comes right back to my original point that our main, used by most, currency is NOT blockchain based. Exchanging blockchain to blockchain is very trivial. Exchanging what most people use into blockchain is the holy grail of exchanges.

I think the only possibility for what you want is to have ripple in the middle.

Anyway, I still think that a decentralized exchange btc/usdCoin has many advantages. Even if you still have to convert usd into usdCoins.
For example, some people keep dollars in an exchange and only buy bitcoin when they're going to spend them to avoid price fluctuation risks.
But they have other risks by doing that. For example, the exchange gets hacked, the attacker sells all your usd for btc and they're gone. Fishing attacks, the exchange can easily manipulate the market by showing false data...
They could store the usdCoins on their computer and avoid all those risks and disadvantages. They can backup those dollars, etc.

So, yes, the idea of usdCoins and decentralized exchanges has value even if it's not the holy grail you're looking for.

Although I defended chain based usdCoins earlier, now I think that having a centralized there's not much added value in having decentralized accounting. An OT-like minter can do the accounting himself. If instead of the OT scheme, the coins were sent to public keys, you could have decentralized trades with bitcoin. Those coins would be as traceable as bitcoin (for the minter, much less for others) instead of "OT untraceable". I really think there's no difference, but fellowtraveler hasn't clarify that to me (or he didn't undesrtand me).
I have to rewrite it, but it could be something along these lines.
The idea is mostly inspired in the decentralized ripple protocol and open transactions, but with offers of trade of IOUs instead of credit lines (ripple) and without the so called "untraceable cash" (ot).

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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March 15, 2012, 07:02:11 PM
 #99

This comes right back to my original point that our main, used by most, currency is NOT blockchain based. Exchanging blockchain to blockchain is very trivial. Exchanging what most people use into blockchain is the holy grail of exchanges.

Fiat is just another commodity. So you might as well be thinking about how to exchange irreversible, blockchain-based currencies into in any commodity in general instead of worrying about fiat as if it is so special.

Besides, if you can convert it into alpaca socks you can in turn convert those into fiat. So solving the problem for "goods and services in general" is maybe where we should be looking when thinking about fiat. Instead of thinking lets convert into fiat so that we can buy "things in general", leave fiat out of it and just convert directly to "things in general". Then if you really, absolutely cannot live without fiat, convert some "things in general" into fiat.

-MarkM-

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March 15, 2012, 07:50:28 PM
 #100

This comes right back to my original point that our main, used by most, currency is NOT blockchain based. Exchanging blockchain to blockchain is very trivial. Exchanging what most people use into blockchain is the holy grail of exchanges.

Fiat is just another commodity. So you might as well be thinking about how to exchange irreversible, blockchain-based currencies into in any commodity in general instead of worrying about fiat as if it is so special.

Besides, if you can convert it into alpaca socks you can in turn convert those into fiat. So solving the problem for "goods and services in general" is maybe where we should be looking when thinking about fiat. Instead of thinking lets convert into fiat so that we can buy "things in general", leave fiat out of it and just convert directly to "things in general". Then if you really, absolutely cannot live without fiat, convert some "things in general" into fiat.

-MarkM-


Physical commodities are irreversible as well, just like Bitcoin. I guess if we use cash in envelope delivery for exchanges...

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