Topic: Fuck the crash, lets just keep moving forward (Read 5660 times)

Why the only way, Shinobi?  There is ultimately *no* difference between a privately-run bank rating and insurance company that enforces certain security and accountability standards on banks and financial institutions in return for certification and insurance coverage, and a government-run bank rating agency that does exactly the same thing.  In both cases, the agency is only as effective as the trust people put in it.  

Right now, we haven't built many private institutions that provide the same level of trustworthy information and ratings as some government agencies.  I think this is because it takes time, effort, and significant resources to build a regulatory agency, and in order to be trustworthy the agency must be completely independent of the companies it regulates.  A government can require its citizens to invest in such an agency through paying taxes, and thus obtain the money to pay for it relatively easily.  A private organization must appeal to private individuals either to invest in the agency or to pay for it as an act of charity -- for the public good.  If it appeals for investment, it must have a means of making money.  If it charges the companies that it regulates, it is at risk of regulatory capture by those companies, which can threaten to withold their money if it cracks down too hard.  If the agency appeals for donations, it is even more at risk of regulatory capture unless it specifically refuses donations from the industry that it regulates.  The only way such an agency is trusted is if it manages to overcome these pressures and both regulates fairly and is seen to regulate fairly.

A government agency theoretically answers not to the companies it regulates but to the citizens as a whole, and should (theoretically) be immune to this sort of pressure.  I often think that I'd like to move to Theory because there everything works.  We all know that regulatory capture of government agencies that are supposed to look out for the public interest is a HUGE problem in the United States and many other countries.  This happens because it takes people with credentials and expertise to regulate many industries, such as banks.  There is a limited supply of people qualified to understand these industries.  The industry itself provides the vast majority of jobs for these people.  Many regulators go back and forth between jobs at the regulatory agencies and jobs in the companies that they regulate.  If they regulate too aggressively, they are not welcomed back by the companies in question, not surprisingly.  The only way a government agency is trusted is if (surprise!) it manages to overcome these pressures and regulates fairly.

So, from where I sit, the big difference isn't that government agencies are (or are likely to be) more fair and impartial than private companies that do the same thing.  It's simply that funding an agency or company at a level that will let it exist and work at all is easier if you can use taxes than if you have to raise the money in other ways.

"Easier" is not the same as saying that privately run agencies are impossible.  If a large enough group of people is motivated sufficiently, there is no reason that I can see that they couldn't build a private institution that independently certifies banks and financial institutions, and provides insurance for those institutions.  They just have to think it's worth doing and be willing to put the time, effort, and resources into doing it.

The MBC fiasco shows no such thing. And why are you so quick to run to your gunmen?

Exactly right. However, calling it "one area" implies that it is some small piece of the whole. Decentralization fails entirely because of this. Although everyone is so against "regulation" by a central authority, it is ultimately the only way to deal with this issue. The MBC fiasco should lay to rest any belief that a web of trust or other informal decentralized trust-based self-regulation system can work.

What crash? Someone with limited dedication to bitcoin got a share of the early huge supply of coins, and decided to dump them at the exchanges. Kind of stupid, though - he already managed to drive down the exchange rate so he gets less profit out of it. But something like this had to come sooner or later, and now he have to wait for the learning process to get started...

On the plus side, when this is over, we'll have a lot more curious people with some bitcoins as they are cheap to get now, which will make all the newly emerging bitcoin businesses prosper.

Focus as much on building trust, as on making it unnecessary.  Help the developers get scripts enabled (https://en.bitcoin.it/wiki/Script) so we can use smart contracts (https://en.bitcoin.it/wiki/Contracts) to avoid needing it so much in the first place.

We are currently working on something that fills this hole. I am going to be starting a thread outlining the services we will provide at the Bitcoin Business Bureau to gather input from the Bitcoin community tomorrow evening as to how we can improve upon our ideas before launching.

But that's not going to happen. At this point, making such changes would be like trying to centralize torrents, and restrict access to the 18+ crowd.

Bitcoin is what it is folks, the protocol is not going to go through any radical changes... it's just too late.

If you think something drastically different is needed instead, your only option is to build that new, better Bitcoin 2.0 and let the "inferior" one wither away due to all its supposed flaws.

And you might not want to delay in getting the competing blockchain to market....

What BusMasterDMA said.  For merchants that accept Bitcoin, a consumer rating web site like Yelp would be an excellent idea.  For banks, a trusted independent insurance agency that has the same sorts of standards and testing regimen that non-Bitcoin banks and financial institutions must meet would be needed.  Very few consumers are in a position to rate the security and trustworthiness of a bank, any more than they are the qualifications of their doctor or the engineers that designed and built their automobiles or the bridges that they drive over on those automobiles.

That's one area where the decentralized approach to running an economy does not work so well -- at least, not yet.  Anarcho-capitalists and libertarians haven't built appropriate non-government institutions that an average person can rely upon to assess the safety and trustworthiness of work done by certain highly technical, complex professionals such as doctors, engineers and (yes) bankers or stockbrokers.  I don't believe that people will give up modern medicine, modern buildings and roads, or modern monetary systems, so there *must* be some means to support people in deciding which medical service providers, builders/engineers, and banks to trust.

In developing a rating system, I think we should distinguish between merchants and banking services.   

A Yelp-like service could work well for merchants.  After a successful transaction (received goods) a rating/review could be written.  We would however have to invent a way to deter fraud in the rating system itself.  A determined fraudster would attempt to spam the rating system with good reviews for his fraudulent shop bad reviews for competitors.

Banking systems however would not lend themselves so well to such a rating system.  There is no way to conclude that the service provider is not a thief.  The best you could do would be to leave a review that says, "I haven't had my bitcoins stolen. Yet."  Insurance seems more appropriate than ratings for banking services.

Cash can and is being used on the internet (that's what bitcoin is and thousands of transactions have already been successfully concluded) - you just need to know who you are dealing with and be willing to deal with the consequences of a seller not delivering.

I too believe in his good intentions, but his pushy approach was a bit off to some of us. If we are to create "trust authority", this authority needs support by the community.

I don't if there is an existing one, but at this point I feel like Mathew's UABB is somehow trustworthy (just by looking at his photo and reading his posts on the forum). Other firms? hell, we'll need to verify them before we can trust them, and who's going to do that if not Mathew?

Are there any existing businesses already heavily invested in doing background checks that would be willing to permit the results of their check, verifiably being the results of their check (they sign it digitally, for example) to be made public? Maybe even made a matter of "public record" ?

-MarkM- (Why start up a whole competing background check company if one can already buy background checks?)

I had, and still have, full confidence in Bitcoin, with this crash and the next 20 to come (can't say anything about the 21st one!).

I think that giving Mathew what he wants and letting him audit Bitcoin services and give his UABB seal of approval would greatly increase confidence in bitcoin businesses. The problem is that every 15 year old is setting up a business today without thinking about what happens if things take the wrong turn (no offence, BitMan, I totally support you and your projects!).

An entity like the UABB is something that comes out of trust that the Bitcoin community gives to the auditing entity, he seems a reliable guy that knows his shit, and he can take care of validating businesses and making sure they're not spoofed or run by someone who cannot afford to make a wrong turn...
And it doesn't need to be run on donations, every business that wants to get the seal of approval from the UABB will have to pay a sum that the UABB will define in advance ($100-$500 seems reasonable) that will cover the cost of the background check.

Bitcoin is safe, the problem is problematic businesses.

But if I pay cash in real world, I expect the seller to hand me goods right away - my left hand gives him cash and my right hand takes goods from him.
If he refuses to hand me the goods, I can beat him up at the spot. Technology of inflicting severe physical damage over the internet does not (yet) exist, therefore cash can't be used online.

I instantly fell in love with your title!

My take on that is that we should build trust in the Bitcoin itself and - at the same time - promote healthy distrust in services keeping wallets online.

Bitcoins can never really "die". It's not a company with stocks or anything like that.

This crash and other negativity may make it unattractive to most people. But who cares?

It will still float around and as long as it is, EVENTUALLY something else that is built upon this 1.0 "beta' will take the mantel.

The cycle of birth and rebirth will repeat itself until a victorious Bitcoin-like decentralized system emerge.

You can stop Bitcoins, but you can't stop time. Every second is one moment closer to the death of Bitcoin's opposing paradigms.

This is what we're working on now.

But trust is a harder problem.  Yelp doesn't improve the trust of brick and mortar stores, the bricks and the mortar do that.  The problem with web of trust is that you must understand what you're trusting.  With Public Key Infrastructure (pki) the web of trust is only Identity.  That is you can 'trust' that the key used to sign one document is indeed the key associated with a particular public key or the same key used to sign a different document, and to the degree that others have also signed the public key, they assert that the person is who he said he is.  This is not the same as saying that the person wouldn't steal from you.

As ebay has proven online reputation systems are difficult to build.  It's always easy to build up a lot of fake reputation, simply to do one scam after which you don't care if you get a single bad review.  We are working on designing a system that is weighted so that it takes many successful transactions to build reputation, but each bad transaction makes a huge negative impact.  We are optimistic that we have a good solution, but we still have a fair amount of work to do before it's ready for prime time.

Meanwhile use bitcoinlocator to trade in bitcoins face to face where trust and identity are much easier to deal with.

One of the main problems with trust is the steep learning curve.  Especially since at least half if not more of the posts in any threads on this issue are Satire, Sarcasm, Insult humor, etc.  People on a point low on the curve don't "get it" and instead just get confused.  Oh, and get their coins stolen by someone with more knowledge higher up the curve.  Then they come on the forum to mock the victims for being stupid to the amusement of their peers.

Furthermore, the bitcoin client does not "just work".  The first thing it does when a noob dl and install is put an unencrypted wallet in a hard to find place that they don't even know about and just leave it like that... 

To respond to OP, here is how to establish trust: 1) go to site, 2) click about us, 3) verify information, 4) google "[sitename] review" 5) search forum for [sitename].  Then give them a shot.  If you are going to do more than $1k business, might want to call them on the phone or send some e-mails to feel them out first.

Also to respond to OP, here is how to be an idiot: 1) go to site, 2) check trustedsites.webring.net for the sitename 3) do business with site because they are on the list without further research.

We already have that.