Topic: Credit networks based on real-world relationships (Read 681 times)

If you look at the distributed markets page you'll see some discussion of strong id verification. The Contracts page is really just a lead up to the contents on the markets page. The idea is you can have a P2P bond market, and thus if you want to borrow money you can issue your own personal bonds which are then traded like government or corporate bonds would be. Strong ID verification certainly has a place in such a model.

Hi Mike, I haven't gone through all the references but it seems we have two very different ideologies, from what's at the beginning of 'Contracts':
"Contracts ... allow you to solve common problems in a way that minimizes trust. Minimal trust often makes things more convenient by allowing human judgements to be taken out of the loop, thus allowing complete automation"

It's a shame that I can't go through all the details in your proposal for now, but from parts of your London talk and the wiki pages, I feel that they try to secure people's wallet without releasing their identities, by encouraging a system with minimal trust. Assuming it's technically feasible and bulletproof, I wonder what's the overhead will be.

The credit network in my mind seem to have conflicts with privacy, as it relies on the transaction history with real identities (at least accessible by the whole network that the person participates in) kept in the credit network. It seems to me the cheapest way that I can think of.

BTW here's an example (not as a proof that it's cheapest) here are some technical details to handle theft with the system:
If a wallet is stolen from A, the thief have 2 ways to do with it:
1. keep it
2. transfer the bitcoins to a target address T (for simplicity say only one target address)

1. If the thief keeps it forever, so it's just like your physical wallet was stolen on the street, there's nothing you can do other than tracking the thief through police, which for bitcoins is network security experts who may track the stealing. Any techniques that try to make the recovery easier can be complementary.
2. this is most likely. There are two cases:
   a) the target address T is in the credit network, just need to ask that person B, who may or may not the thief, to give the money back. If B gives it back, B's credit doesn't change; if not, then some punishment, like can't transfer from that address again to any address in the network unless payback is done.
   b) the target address T is not in the credit network, try to contact that address or any following target addresses (can be a publicly accessible bulletin) to ask it back. Treat the unresponsive addresses like in a)

Thanks for the reference. I just sent them a request for participating in beta. Also I agree with Technomage in Is Ripple a Bitcoin Killer or Complementer? Founder of Mt Gox will launch Ripple:

"Bitcoin is a great currency so there is a lot of potential here. With Ripple it would be possible to create a superb credit market for Bitcoin.

I think Bitcoin + Ripple could be very big. If the Ripple p2p implementation works, that is."

Hi, take a look at

https://en.bitcoin.it/wiki/Contracts
https://en.bitcoin.it/wiki/Smart_Property
https://en.bitcoin.it/wiki/Distributed_markets
https://en.bitcoin.it/wiki/Ripple_currency_exchange

Take a look at Ripple Coin. I think it is exactly what you are looking for.

Thanks a lot for the response. I think I just feel that a technique need to rely on the real-world relationships to thrive.

BTW I just found the Reputation system which seems to try to do it without reveal real identities. Shame I can't post there yet but I am wondering if one can fake identities and rate self.

This is something I agree with. People do need to be able to make their own informed decisions on whether or not to trust another party, but we also need to find a way to alleviate these kinds of concerns if we truly wish for BitCoin to take off as a respected alternative currency. Casual consumers will pass by BitCoin without a second glance if they feel that unsafe about it.


This is another thing I agree with, and I think I've mentioned it on the forum before. Detractors are going to look for more excuses to distrust BitCoin the more that BitCoin continues to grow. BitCoin already has a bit of a negative stigma attached to it as a black market currency. We should be working against that negative image. We can admit that BitCoin has and continues to be used for illegal purposes, but we shouldn't either act like that behavior is okay or simply ignore that behavior and hope that others will.

This doesn't mean that we have to relentlessly pursue that kind of behavior in the name of justice. I just think that our community needs to work harder on disallowing those sort of transactions from this forum and focus on portraying a positive image for the future of the currency, experimental as it may be (as an offhand thought of mine, I sometimes feel like people use the experimental nature of BitCoin as a way to dismiss questionable transactions).

I don't think an identity number system is the answer, but I agree with your basic point: just because the current financial system ignores illegal activities doesn't justify us doing the same. It's an opportunity for us to be the bigger man, so to speak.

This is inspired by Trust No One
As I'm a newbie in bitcoin, please excuse my ignorance.
I like bitcoin because of it's distributed nature. I see the benefit to be able to keep the anonymity (seems to me not so robust if one can cross reference the emails and the bitcoin addresses), but for many cases (like online shopping), we need a credit system to build mutual trust. Otherwise it'll be always a chaos of 'get what you can' and 'give nothing back'.

About the anonymity, I see a lot of arguments about how the current financial system ignores the illegal activities under their nose so it's no problem for bitcoin to allow those too. However what one can do or can do better isn't always what one should do, and I look forward to a day when people can use bitcoin addresses as their identity number. If bitcoin keeps the anonymity as its only advantage, it'll become a underworld system, and its rivals will always use this as an excuse to shut it out of the open market.

The escrow service (https://en.bitcoin.it/wiki/Bitcoin_Escrow_Service) relies on the escrow partner. In theory it is reliable if everyone using the service know the partner in person, which is itself already a trusted network. So I suppose the idea is to have all these networks merged, so that A can know Z's credit by A-B-C…-Z.