Ok, I have been thinking on this a bit more.
The money account side of the equation could actually be dynamic over time.
It could be set up so that most of the "miners" have several different means of holding or transferring money. Whether it is through Dwolla, Paxum, Libert Dollars, whichever. They would link up with another miner who has the same money service and exchange money that way.
Thoughts?
Topic: Decentralized Exchange - page 2. (Read 3582 times)
I have been wracking my brain on how a decentralized exchange would work in a similar way to Bitcoin.
The high level concept is easy. Have an amount of cash in the system and an amount of Bitcoins in the system, people put in and take out at different rates which gets propagated through the system to keep track of whom has what.
But the hardest part, I believe, is the part about putting money in and taking money out. Unless each user or each "miner" is going to be its own bank and allow physical cash deposits and withdraws, there needs to be a separate hook into regular banks.
I was checking out this site: http://www.neteller.com
They offer a money transfer service via several deposit methods and several withdraw methods including sending you a prepaid debit card.
The fees are what I am not so clear on. It says that a transfer of dollars is 1.9% which is not worth it since you can exchange your money to Bitcoin right now for less than .5%. But they did have a "merchant site" transfers for free.
So, in theory, each "miner" could be a merchant site. They get the cash paid to them, then return Bitcoins to the buyer. Or the buyer pays Bitcoins and they send them cash. The miner could get a cut of the transaction (.1% or so).
The way I saw the distributed program working would be:
Someone wants to mine: They set up the program with a deposit of either Bitcoins or money. Once they set it up, the system takes the amount deposited and distributes it evenly based on total amount in the system. So that if Bitcoin is worth $5 and you put in 10 Bitcoin, it would even you out so that you have $25 in your cash account and 5 Bitcoin in your BTC account. As more money is brought into the system, the ratio would adjust to where the "price" would go up for Bitcoin. If more Bitcoin are brought in, the ratio would favor having dollars.
The means of depositing and withdrawing could be expanded as the system evolves. But the underlying system of exchange could continue on.
The high level concept is easy. Have an amount of cash in the system and an amount of Bitcoins in the system, people put in and take out at different rates which gets propagated through the system to keep track of whom has what.
But the hardest part, I believe, is the part about putting money in and taking money out. Unless each user or each "miner" is going to be its own bank and allow physical cash deposits and withdraws, there needs to be a separate hook into regular banks.
I was checking out this site: http://www.neteller.com
They offer a money transfer service via several deposit methods and several withdraw methods including sending you a prepaid debit card.
The fees are what I am not so clear on. It says that a transfer of dollars is 1.9% which is not worth it since you can exchange your money to Bitcoin right now for less than .5%. But they did have a "merchant site" transfers for free.
So, in theory, each "miner" could be a merchant site. They get the cash paid to them, then return Bitcoins to the buyer. Or the buyer pays Bitcoins and they send them cash. The miner could get a cut of the transaction (.1% or so).
The way I saw the distributed program working would be:
Someone wants to mine: They set up the program with a deposit of either Bitcoins or money. Once they set it up, the system takes the amount deposited and distributes it evenly based on total amount in the system. So that if Bitcoin is worth $5 and you put in 10 Bitcoin, it would even you out so that you have $25 in your cash account and 5 Bitcoin in your BTC account. As more money is brought into the system, the ratio would adjust to where the "price" would go up for Bitcoin. If more Bitcoin are brought in, the ratio would favor having dollars.
The means of depositing and withdrawing could be expanded as the system evolves. But the underlying system of exchange could continue on.
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