outline for a simpler virtual currency

[BitLex]

so, to use your transaction system, i first have to use some other completely unrelated security system, which makes it even more complicated.

however, what makes you think that your security system can't be cheated?
i can create a bunch of passport IDs without much effort, what makes you stop me?

besides that, weren't you complaining about anonymity being exception not the norm?
so you obviously want anonymity, but now you want everyones passport IDs, or some other proof-of-identity, that kinda doesn't match.

[wolciph]

OP, I suggest you lookup toecoin on this forum. It's a really great system to insure nobody can cheat during the bootstrapping process.

[diogenes]

so, to use your transaction system, i first have to use some other completely unrelated security system, which makes it even more complicated.

however, what makes you think that your security system can't be cheated?
i can create a bunch of passport IDs without much effort, what makes you stop me?

besides that, weren't you complaining about anonymity being exception not the norm?
so you obviously want anonymity, but now you want everyones passport IDs, or some other proof-of-identity, that kinda doesn't match.

Ok, you're still not getting.

Your getting confused the between the general day-to-day transaction system and the authorization system.  These are completely separate systems!  

For general day-to-day transactions it is *completely* anonymous.  The transaction software on your phone doesn't store or exchange *any* of your identity credentials.

However, the bootstrap transaction that new user uses to claim the reward *does* require them to establish their identity.  The bootstrap process calls upon the authorization system for new user verification.  However, the authorization system needn't store many of your credentials.  For example, my crowd sourced method stores *only* a cyrptographic hash of a passport ID which isn't very useful for people to know.  This is the only credential that a hacker could steal if they managed to break into my proposed authorization network  (note that my proposed system could use the same encryption algorithms as the bitcoin network-- ie, it would be no less secure than bitcoin).

Also, please note that a new user doesn't have to claim the 1000 coin reward if they don't want to-- it is completely discretionary!  ie: a new user needn't reveal any identity credentials at all, however they will not receive the bootstrap reward if they chose this route-- but they can still make day to day transactions (ie: they could do work in exchange for coin).

[SATOSHl]

I was the first to recommend 1000 initial coins.  See this link http://bitcointalk.org/index.php?topic=4212.msg63806#msg63806

SATOSHI out!!!

[BitLex]

don't worry, i got that completely separate systems part,
but completely separate systems dont make things better, it makes things worse.

and you still havent mentioned how you gonna keep me from creating fake IDs, which is not a problem at all,
it's not that hard to create a few thousand fake IDs to claim the free-newbie-cash, how do you stop that?
or do you just not care?

[silversurfer]

Sounds like the OP want 1000 bitcoins for free xD

[diogenes]

don't worry, i got that completely separate systems part,
but completely separate systems dont make things better, it makes things worse.

and you still havent mentioned how you gonna keep me from creating fake IDs, which is not a problem at all,
it's not that hard to create a few thousand fake IDs to claim the free-newbie-cash, how do you stop that?
or do you just not care?

That's what the verification system tries to weed out!

In the real economy, no country has ever stopped people from counterfeiting money-- however the government can design the currency to make it quite hard to convincingly forge bank notes.  Some people still manage to pull it off and get away with it but its quite rare and in the big scheme of things doesn't affect the economy in any major way.  Fraud and counterfeiting is something that we live with-- as long as it remains relatively small scale most people accept this and are not worried by it (eg: I've yet to see *anybody* go on street marches protesting about the amount of counterfeiting in their country)

Similarly with this virtual system we can't stop people from creating fake credentials and trying to pass them off as genuine.  However, we can implement systems that try hard to expose this illegal behaviour and also once exposed to penalised those involved.   Any potential fraudsters would weigh up the pros vs the cons before they decide to commit the crime-- by decreasing this ratio and by increasing the chances of being caught we would make it less appealing to fraudsters and thus reduce the prevalence of fraud.

For example, under my proposed verification system you would need to convince 17 out of 20 people that the documents used as evidence are genuine.  Now if the majority of users aren't happy with the quality of this system we could make this system even stricter-- for example we could require that 48 out of 50 people argee that the documents are genuine.  Or we could link this system to other technologies such as openID or web-of-trust. We could also increase the penalties of fraud by increaseing the bond to be far greater than the reward and also automatically hand over videos of suspect fraud cases to the police.  We could even implement a system that requires you to appear in person at a designated authorization office for in-person verification by approved officers.

The point is that we can increase the qualitity of verification system to the point that most people would be happy with it even though it is not 100% perfect.

[Anonymous]

I ll stick to using carrots. At least i can eat them.

[BitLex]

ah, now you want documents (multiple i guess), not only IDs.
so i have to fax you my passport, my last electricity bills, certificate of birth, maybe send you some blood-samples to check my DNA?
and if those chosen ones arent ok with what i sent, i'll have to come around in person.

so you really want everyone to go through a bureaucratic nightmare, to get those free coins to try the system.
sounds like a plan, good luck with that.

seriously, i hardly doubt anyone would do that,
everyone would just stick to carrots instead.

[vuce]

diogenes, you still haven't told use how you would prevent someone from tampering with his own balance.

[diogenes]

ah, now you want documents (multiple i guess), not only IDs.
so i have to fax you my passport, my last electricity bills, certificate of birth, maybe send you some blood-samples to check my DNA?
and if those chosen ones arent ok with what i sent, i'll have to come around in person.

so you really want everyone to go through a bureaucratic nightmare, to get those free coins to try the system.
sounds like a plan, good luck with that.

seriously, i hardly doubt anyone would do that,
everyone would just stick to carrots instead.

Well I never said you need to give blood samples, but yes, I believe people would be prepared to verify themselves because they get a sizeable number the coins in return.

Compare this to bitcoins, where it is quite hard to get coins-- you have to *pay* a bank and currency exchange for the thrill of getting something that you can't do a great deal with.


Actually, let's compare my proposal with bitcoins in general since you've mentioned some issues which you see as potential problems (all of which I actually mentioned in the original post and I have responded to them with reasoned argument).   To refresh things I'll reiterate the four main setbacks that I see with bitcoin in my original post. Now let's see you defend these problems-

1) Anonymity is the exception not the rule- it is actually hard to trade anonymously.  If you do wish to trade anonymous you need to trust the services of third parties and these third parties will also charge you a fee for their service.  (My proposal is completely anonymous for day-to-day transactions)

2) Bitcoin in its current form cannot be used for day-to-day transactions with the same degree of ease as cash. When you purchase with cash the transaction is settled immediately with bitcoin it takes time for the transaction to be acknowledged by the network.  (Under my proposal transactions clear immediately, there is no delay)

3) It is envisioned that in the future *each* transaction will incur a fee.  Cash doesn't have this impediment. (In my proposal all transations are completely free)

4) Bitcoin relies on the internet.  If the internet goes down (such as caused by a telco outage) or you are in a location where there is no internet service available then you're out of luck-- you simply can't trade.  (My proposal isn't tied to the internet- you could trade anywhere if using mobile phones with local network capabilities such as near-field or bluetooth)

(I'm certain that you roll out all the normal arguments that have been used before on this forum-- however, what you're ignoring is that the common man -ie: those who actually use cash every day-- wont tolerate any system that it not as convenient or anonymous as cash.  Small real world merchants especially -ie, those whose deal with a lot of cash sales in physical shops with physical goods won't accept anything that complicates or hinders their operations)

[diogenes]

diogenes, you still haven't told use how you would prevent someone from tampering with his own balance.

Your balance is stored in encrypted form on your computer-- only the transaction software has the key to decrypt it.

[vuce]

diogenes, you still haven't told use how you would prevent someone from tampering with his own balance.

Your balance is stored in encrypted form on your computer-- only the transaction software has the key to decrypt it.

Yeah, sure, but that key is in the software somewhere. Someone will surely be able to reverse engineer it, as they always do.

[Alex Beckenham]

That's basically complexly it.

It might be time to rename your thread title.

[BitLex]

Bitcoin in it current form cannot be used for day-to-day transactions with the same degree of ease as cash

that, excuse me repeating myself, is not true,
it CAN be used for day-to-day instant transactions in the same way, cash does.
you can easily print bitcoin-paper-bucks and use those paper-bucks exactly the same way, you use cash today, without any delays or confirmations, without any connection to the bictoin-network or the internet at all,
nothing keeps you from just doing it.

BitBills is the first attemp to do exactly that.

the same thing also proves your transaction-fee- and internet-rely-arguments wrong,
cash doesnt have this impediment, bitcoin-paper-bucks, or BitBills also don't have it.
create them, use them and you got what you asked for.

what YOU are STILL ignoring is, that cash is not a currency,
delays, fees and all that nasty stuff also appears, if you use your common currency to pay online, or send bank-wires, or do whatever else is done the non-cash-way.

Oh, By-the-way Bitlex (aka: Noodles Skute of 64 Gereonswall,Cologne,Germany, ph:+49 2218306297 email:noodles.skute@gmail.com)  I've given you my passport No.  I'm still waiting to see what sort of mischief you can get upto with it.

well, i guess everyone already knows i'm Noodles and my mail is on my profile anyway,
but i wasnt the one who was asking for anonymity to be the rule, that was you.
i don't care if you know my name (which you actually don't know), or that i'm from germany (which is obviously true).
and i care even less about your passportID, why should i bother trying to hunt your identity down? what's in it for me?

[anisoptera]

Well  I've never said you need blood samples, but yes, I believe people would be prepared to verify themselves because they get a sizeable number the coins in return.

Compare this to bitcoins, where it is quite hard to get coins-- you have to *pay* a bank and currency exchange for the thrill of getting something that you can't do a great deal with.

You haven't really explained why people will give me anything for these coins created from nothing just for my identity. Free coins are valueless by definition.

This is ignoring all the other problems with your idea including your ludicrous idea that people will somehow not be able to alter their balances which are solely stored on their local systems. If you can transfer with no connection to a global network, then I can just impersonate a client talking to myself saying it is transferring 1 million DumbCoins to me. How do you authenticate that the other end is actually doing what it says it's doing?

What if I have a client installed on a disk and I clone that disk, then transfer my balance to someone, then restore the clone? How does your completely disconnected client know that its balance was transferred in some alternate universe?

And this is just attacks I can think of that don't involve hacking the client or wallet itself in any way.

[diogenes]

Well  I've never said you need blood samples, but yes, I believe people would be prepared to verify themselves because they get a sizeable number the coins in return.

Compare this to bitcoins, where it is quite hard to get coins-- you have to *pay* a bank and currency exchange for the thrill of getting something that you can't do a great deal with.

You haven't really explained why people will give me anything for these coins created from nothing just for my identity. Free coins are valueless by definition.

......

So, according to your logic you would be prepared to give me all your hard cash holdings becuase the government prints this money from nothing and thus it is worthless.  Well, I'm quite prepared to accept your "valueless" cash.
Also, according to your logic if I randomly give away 100 euro to someone on the street than that money is worthless because free money is valueless-- I don't think the person who receives it would say so, they would be more than likely to gladly accept it.

Hmm, me thinks that your argument doesn't really stack up.   

My currency would have value for the same reason bitcoin does-- it is limited in supply and has other properties that makes it a candidate medium of exchange.

[gigabytecoin]

One of these two states are true:

OP is crazy.

All of us are crazy.

[anisoptera]

So, according to your logic you would be prepared to give me all your hard cash holdings becuase the government prints this money from nothing and thus it is worthless.  Well, I'm quite prepared to accept your "valueless" cash.
Also, according to your logic if I randomly give away 100 euro to someone on the street than that money is worthless because free money is valueless-- I don't think the person who receives it would say so, they would be more than likely to gladly accept it.

Hmm, me thinks that your argument doesn't really stack up.   

Are you trolling? Obviously this logic doesn't hold. Money is worth what people will give you for it. Fiat currency has value when the government prints it because people ALREADY have assigned a value to it. If I can get 1000 DumbCoins just by existing, then what value does a DumbCoin have? Why would anyone give me anything for one?

My currency would have value for the same reason bitcoin does-- it is limited in supply and has other properties that makes it a candidate medium of exchange.

Being limited in supply is not what makes bitcoin have value. You seem to have a fundamental misunderstanding of how currency works. And your proposed currency has no other properties that make it a good medium of exchange.

Also, you don't even have "limited in supply" going for you. There is no limit of the supply of your money. Even assuming that you somehow protect 100% against fraud and always give exactly 1000 DumbCoins to any one person, new people are created every day. You can make a new person in 9 months. Sometimes you even get "lucky" and make two or more. Every time someone is born, 1000 (potential) new DumbCoins are created.

[Comepradz]

1000 free coins for new user?
Oh man, haven't you ever hear about deflation? your coin value will decrease as soon as new user joins... I think you must reconsider that issue if you really want to realize it.