Topic: [ANNOUNCE] Zero Reserve - A distributed Bitcoin Exchange - page 2. (Read 57113 times)

My certificate:

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+1, it's my project for the coming weekend!

I think I should (finally) try this out, too.  If I can get Retro Share & ZR up and running, expect my friendship request soon.

I'd like to focus on something else: Bitcoin currently has an Achilles' heel that puts it on the mercy of the government: The exchanges. Being at the mercy of a competitor is usually not a good idea. No idea what is really to blame for the MtGox desaster, but I fancy to think it all started with the theft of 5 Million Dollar by the US government. Then look at the Chinese exchanges - they are forced to live day-by-day and whatever "Rule-of-Law" exists in China, it does not apply to Bitcoin exchanges. Should the Brits choose to shut down Stamp, we are in serious trouble!

And you know, it does not need to be an official shutdown. It is sufficient to harrass them with bogus allegations like money laundering, rape, child porn or collaborating with the Russians (this one has been out of fashion for 2 decades, but will see a comeback). It really does not matter that it turns out after a year or 2 to have no substance to it.

With an operational Zero Reserve network, attacking Exchanges becomes counter productive. It is possible for govt to trace and tax Bitcoins coming from an exchange, while every Bitcoin that comes out of a ZR trade has been anonymized. Governments and central banks may wish to shut down Bitcoin exchanges, but not if something much worse (from their perspective) would replace them. A working ZR network offers an insurance against government crackdown.

I don't know - it may fit better to Chinese culture and attitude. I've heard the argument quite often that boils down to: "I trust the banks, but I don't trust my friends / family."

great job, I will try it.
I come from china, maybe Chinese need it.

Interesting project to be sure.  Will be trying to get a rig setup this evening to give it a quick go

I was replying to phelix, not about your design, which I understand perfectly.

Effectively, the Ripple trust path does this by going through someone you both trust, so it's not really different from having that someone escrowing your bitcoins, and at the same time audits your fiat transfer, isn't it?

You don't need to really enforce the bank transfer, you just need to verify that it has happened, before you release the escrow.

This.

Change is just a bank run away

To give the testing a more realistic feel I suggest we all consider the default IOU "µg of fools" to be worth 1 USD.

Bitcoin made millionaires of people who bothered to invest a few CPU cycles, true. ZR will not be able to repeat that. But then, the risk was very high that Bitcoin would not go anywhere in 2009/2010. ZR would be useful at a relatively moderate network size.

Then there are the other advantages, for example that a Bitcoin purchased with ZR is no longer tainted as one withdrawn from an exchange is.

If you want to make the project self-perpetuating I am afraid there needs to be a disproportionate reward system. Compensating on a fee alone doesn't provide enough incentive. It needs to compensate for the asymmetry in the network effect: Those who join now need to be rewarded 10x more against those who join when the network is 10x larger. The way it looks right now is that this is not the case, as the reward seems to be not dependent on the time you join the network, but merely on your "personal" network, which you can develop at any time. Failure to understand rewards and network effects means failure to accommodate for human complacency and brain chemistry.

That said - how could ZeroReserve introduce such a reward system? Without the concept of scarcity of a shared token, as in bitcoin, the only other perceivable way is to borrow from pyramidal schemes, where older nodes benefit from the addition of newer nodes. Of course that doesn't extinguish the evil of rent seeking.

True. Actions > words.

Would you be interested, if producing a cryptographic proof for a bank transfer, is actually possible?(e.g., if banks start supporting digitally signing bank statements)

The routing of payments can carry a small fee. This fee is currently set to "0". the plan is to enable fees and let the market regulate them once Payments can go through multiple routes, so nodes can choose the cheapest route. The more payments you route, the more you earn.

I expect the network topology to move outwards from a "kernel". As the network grows, these nodes at the topological center are more likely to route payments than newer nodes. That is particularly true if you developed strong business relations with your peers and have substantial credit. Large credit makes a route more likely.

There is also the fact that credit is not necessarily symmetric, not even mutual. Participants may know you and grant you credit, even though you don't know them and therefore do not grant them credit.


There is only one way to show appreciation. Follow the "Getting Started" guide (link in the signature) and send your Certificate to
[email protected]


In case anyone wonders why this email address looks weird - the email is going into the Retroshare Network, where it is untraceable. The mailbox is actually a Retroshare GXS ID. There are other reasons to install Retroshare than just Zero Reserve. Untraceable Email is one of them.

One of the lessons learned from bitcoin is that the main driver of adoption is capital formation based on scarcity, basically rewarding early adopters disproportionally. Bitcoin would have probably suffered the same fate as ZeroReserve to date if it weren't for the concept of an arms race.

I still think this project has tremendous merit and would encourage every capable person to look at it and try to apply it to their economic framework. I am myself guilty for not following up on the peaked interest a while ago - there are many excuses but as pointed out above, excuse is irrelevant - what matters is reward.

So to move this discussion a bit ahead in what maybe the right direction, would you please detail how the reward system in ZeroReserve works and how it would facilitate adoption?

Your work and your contribution is truly appreciated.

Zero Reserve is not Ripple and cannot be. There are no f***ing strings attached. The code is 100% OpenSource.  There is no special entity in the ZR network. There is no ZeroReserve Ltd. This is a communitiy thing, but so far without community. There is money to be made with ZR, too, but like with Bitcoin mining, anyone can. There is even an early adopter effect.


The code is there to play with. It's quite easy to install. And for Windows users, there is even a install wizard.

Ich kann die Pferde nur zur Tränke führen. Saufen müssen sie schon selber.


Network effect is indeed the key word.


So far I haven't contributed anything, because so far, there are no takers.


Should the test run fail due to lacking participation, I will take that as a vote against truly distributed, OpenSource Exchanges and for the control of Bitcoin through the corporate state. Consequently, I'll withdraw.

I understand your feelings here.
Alas, don't underestimate the thousands of lurkers here! I, for example, didn't contribute a single word here, but am following closely. This time, I didn't feel like actively testing the system yet, the shock of what ripple turned out to be was too much for me I guess..

There are 35k views here.
It will gain more momentum when people actually play with the code.
This one will have, and has to have, an even stronger network effect than Bitcoin itself.

Thank you for what you are contributing to this world.

Ente

I could agree with you or not, but it's a fact of the world that many would rather trust their money with banks, then with their friends.

Also, under the assumption that you trust your friends, there are still other ways to conduct the transaction, just wire transfer money to your friend using online banking, and ask someone whom you both trust to escrow the bitcoins/audit your wire transfer, such a process is formalizable as well.

Further, if you can have a cryptographic proof of transfer, why the need for IOUs?

The first line reads like an insult to a lot of people's friends. I'd trust my friends more than anyone or -thing I don't know as well, including but not limited to corporations.

I think it's important to formalize trust. Just because there exists some complicated transaction using firends' trust, few would execute it by hand. If ZeroReserve manages to simplify this process enough, it becomes preferable to trusting an ominous entity that tends to eat your funds in one big bite -- like Gox and the numerous other failed exchanges.

Banking -- the trade with IOUs -- is actually quite efficient. It mostly fails on the wrong places piling up trust. If trust becomes more explicit and less reliant on magic entities doing magic things with trust they implicitly get, it's a great approach.