Then the conversation opened up to having a simplified BitCoin wallet in the BitTorrent client to simplify donations, this way the user doesn't need to leave the app to make a donation, and when that happens, a world of possibilities is opened up, the most interesting being:
In general, this is a bad idea. Holding Bitcoins on an individual's computer in nothing more than a file with the private keys on it is a terrible, terrible idea (think: malware, drive crashes, etc). Yes, its true that most desktop wallets do it today, but they're moving away from that direction (hardware wallets, offline cold storage, etc). If you move the wallet into a torrent client, you now have to put in as much effort as other wallet creators to ensure security (hint: thats a hard problem, and if you think users are going to listen to your instructions and only move some small amount into their torrent client, you havent met users...). Additionally, users may end up having to pay transaction fees to move bitcoins from their wallet to their other wallet (terrible UX, in fact, just making users move coins between applications itself is a terrible UX). There are better options, and wallets already expose the ability to make payments. As for more advanced features, I think we'll see those being exposed by the wallets to third-party applications (Bitcoin Wallet on Android will hopefully soon support any application opening up micropayment channels).
2. BitTorrent + BitCoin as a technology toolset on which on-demand content delivery services (think a Netflix/Spotify competitor) could have solid building blocks to manage content delivery and billing, no matter the country on which customers are. All .torrents provided by the service would be tagged with Bitcoin addresses made specifically for each piece of content, and user account balances would be loaded in either Bitcoin (if the country allows) or in a local currency (and it's then up to the service provider to convert the local currency to BTC and keep everything uniform in Bitcoin deep in the system).
I may be missing something, but I fail to see how integrating them directly allows for this more than simply using both does? Today, its relatively easy (well, ok, maybe not, but possible) to charge someone for access to your content and then allow downloads assisted by Bittorrent-style downloads (eg WoW).
3. Seeding for Bitcoin. This is one of the most controversial ones, and Matt Blue (bitcoinj developer) suggested this could be achieved with Micro-payment channels
Thats me, for reference.
https://code.google.com/p/bitcoinj/wiki/WorkingWithMicropayments - The idea is that when seeders announce themselves to trackers they send along their Bitcoin addresses, if a user is experiencing a slow download, the user can specify a certain amount of bitcoin to pay willing seeders for a unit of transfer (to be discussed, bittorrent chunk, byte, megabyte, transfer rate?). Seeders would see the bidding requests and send the pieces to the highest bidders, once the contract has been fullfilled between seeder and downloader, the seeder could request the earned BTC and not send another piece until the micropayment is received. In this process the tracker could also be involved as an escrow and get a small processing fee.
Bitcoin doesn't generally support micropayments directly (ie you cant make one-off micropayments very easily without a trusted third-party). The micropayment channels implemented there depend on the idea that A has a long-term relationship with B where neither trust each other to provide service and thus A pays B in tiny increments as B provides service, adding up to some reasonably-seized payment (Bitcoin supports small payments, just not high-volume micropayments). Thus, really the only way to implement this is to have peers make micropayment channels between each other and pay for transfer as blocks/MB/whatever are provided. Not sure it would be worth it for average peers (too much transaction cost/overhead for many peers), but it may be interesting for high bw peers to provide payment as an option.
Point number 3 requires bringing experienced Core BitTorrent Protocol developers and Core BitCoin Procol developers together, I was suggested to bring the conversation over here for feedback.
While we are always open to collaborating, we (bitcoinj devs) hope that the micropayment implementation provided allows pretty well anyone to implement micropayment channels
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