some ideas for a decentralized (but not distributed) system
Judging from Paypal's recent shutdown of Coinpal and Bitcoin Morpheus, they are no longer willing to play nice. I would not be surprised to see bank transfers become more difficult, too. The fundamental problem with
all exchanges (as of 05.11 ) is that it's really hard to buy bitcoins. No matter what route you take, you have to jump through hoops. A (really large) number of people are not willing to jump through
any hoops at all.
The primary means of 'getting in' for most new users will be cash. There are a handful of projects that are attempting to set up a global network of cash-to-bitcoin-to-cash dealers; the ones I know about are
We should integrate all of these efforts right now, while they're all still in development. It's inevitable that some efforts will fail, so we should try to make the system robust enough to absorb those failures. We should have a common way to identify a particular exchanger that is exportable to multiple websites (i.e. a GPG key.) #bitcoin-otc already has a significant web of trust set up, and it's not hard to
integrate import that into other applications.
If we have multiple sites using information from a single web of trust,
we should decide on a common API to communicate between those sites. Right now, the OTC database records a user ID (gpg key), a rating from -10 to 10, and a notes field. This is fine for -otc, but other sites will likely want to record additional information in their own webs.
Some stuff that might be saved in a WOT database: contact information, services offered, currencies offered, availability times, trade volume limits, rough GPS coordinates.
If we agree on a protocol such that all sites can share data, we can make the whole Bitcoin economy a 'decentralized exchange.' When any one site fails, another can take its trust database and start with that. To avoid tampering the databases should probably be public knowledge.
edit - since anyone can look up the trust ratings of a particular identity online, many new users may be willing to trust a nearby exchanger enough to send a money order or cashiers' check through the mail. If they send it locally, they should be able to get their coins within a day or so, especially if they email the exchanger a heads-up. Exchangers who are unwilling to meet face to face can do this too, although it might be hard to build trust.
