Topic: killer app idea :) (Read 2466 times)

How about you read my original post properly. Did i ever mentionned that i had the intention of doing this without a license? or even doing it myself?

your answer was off topic and inappropriate no offence though

Here was my question:

why do you think the idea isn't bulletproof? what issue could such idea pose?

Bitcoin surely isn't an ordinary payment method but it has all the characteristics needed to be a currency (bar volatility)even more so than fiat actually.

Interested to know what "specifications" does it lack? and why bitcoin doesn't work like a classic currency?

Isn't there already a coin that mirrors the value of the Dollar? I can't remember its name right now, but it exists.


Yes Bitcoin is a fast way to transfer money but I think seeing Bitcoin as a better Paypal is seriously flawed PR focus for Bitcoin. People should be pushing the idea of Bitcoin being sound money due to its scarcity. The only reason its volatile is cause there are so few actual users of it. All currencies are volitile but once you have 100 million people using one it finds its value pretty fast and is stable. I personally think we need to see Bitcoin in the 10's of thousands before we start to see 'stability'.

Hi OP,

Interesting post, i agree with most of what you are saying and have been thinking the same myself for a long time however i don't like your proposed solution. If i understand you correctly, your proposed exchange would only utilize Bitcoin as a payment network (holding users money in $ until the customer purchases something at which point the $ is converted to BTC for payment purposes and sent to its destination, probably to be converted back to $ at the other end of the transaction).

I believe Bitcoin has to be used as both a payment network and as a currency because one can't function without the other. It is the value of the currency that gives miners incentive to secure/run the decentralised payment network. No currency, no network.

After thinking long and hard about why the average joe isn't falling over themselves to acquire bitcoin therefor pushing the price up legitimately due to demand, and why the price continues to steadily fall even when adoption numbers increase and general good news keeps flooding in I've come to the conclusion that price volatility is the cause of both.

People are rightly sceptical of 'internet money' that fluctuates in value so wildly so aren't jumping in as should be expected by now, imagine being paid your usual salary in bitcoin only to find the next day your earnings won't even buy a loaf of bread, extreme example i know but you get my point. Average joe thinks "i'll just stick with what i know".

As to the reason why bitcoin is experiencing such price volatility i believe it is due to using old 19th/20th century bid-ask exchange systems that were DESIGNED to generate volatility and be open to manipulation in the way that they operate.

Currently BTC price on major exchanges is in the $230 - $240 range. However i value my BTC at a far higher figure as do many others, but if one single person sold a BTC for $100 within the bid-ask exchange system, that would then automatically value my and all others BTC at $100. Albeit only for a short time but still.

This is a flawed and unfair way of determining the value of something in my opinion, we are using 19th/20th century bid-ask exchange systems to determine the value of a 21st century financial asset. Who said we had to use the bid-ask exchange system to determine the price? MTGox because they were the first bitcoin exchange and copied the existing financial trading markets... we all know how well that one worked out and we all know how existing financial markets can be manipulated by those with enough money/power/connections.

So maybe there is another way to determine the true real time (fiat) value of a bitcoin which will decrease overall volatility and enable the fiat price to be set in a fair and stable manner where EVERYONE can dictate the price of a bitcoin without even having to own or sell one., similar to how the gold spot price is set twice a day.

Fix the volatility issues = fix the adoption issues
Fix the adoption issues = fix the the current price issues (which in my opinion will increase due to increased adoption (law of demand and supply)
Fix the price issues = fix the miners not currently making any profit issues

Everything is connected, but people need to change the way the price is set in order for everything else to fall into place, I do have a potentially very simple solution that might make bid-ask exchanges systems obsolete, but right now i just don't have the energy to implement it.

Regards,
J

No, that isen't this

 bitcoin is not suitable as a ordinary payment method, he does not have the specifications of a common currency.

 I'ts great to have the possibility of payment in bitcoin for whose like this so bitcoin does not work as a classic currency.



 

I am seriously starting to get irritated by all those comment claiming bitcoin isnt viable solution because its value is highly volatile, these articles are popping up everywhere

Of course it is volatile,people are not used to free unmanipulated markets, are people really expecting stability when you have a market cap of 3billions? 3 billions is equivalent to 1 very rich man... , bitcoin will stabilize if it is mass adopted and the average joe uses it in his every day life.

I feel that people who badly want bitcoin to fail will use the unstability issue to scare people away and as a result bitcoin not be adopted.


The volatility problem has been sorted on merchants side with bitpay, coinbase,etcc system but someone needs to come up with an app to protect buyer against volatility.

An app that integrates a btc exchange within the payment , customers hold $ and when he wants to pay in bitcoin  the conversion usd-->btc would be done automatically and instantly within the app ,something that will render value unstability totally irrelevant

I know it might be a  more difficult than it sounds but iam sure people who have the skills can come up with such system.

The big payment processor company and banks are coming up with new similar technology and the average joe will use them if they are easier to use because he doesnt understand the importance of not using government issued money.

If people can convert and pay instantly in btc they will do it because btc merchants are offering discount if people pay in btc

This is a technology and innovation war

One solution is to use a combination of Peter Todd's CHECKLOCKTIMEVERIFY -http://www.mail-archive.com/[email protected]/msg06250.html with a sidechain to lock in BTC in a bond where the sidechains algo took a rolling volatility average over the preceding year to calculate the expected risk the community would feel comfortable accepting for digital representations of fiat /gold /ect backed securities that would lock themselves on the blockchain and pay dividends, be partially refunded, or bought back after maturity.

The way it would work in practice:

1) download a wallet and deposit arbitrary amount ... i.E.. 2 BTC(lets say is worth 500usd at the time)
2) Decide you want half of it denominated in a more stable currency and half in BTC
3) Transfer half BTC to purchase 250 of bitusd(name doesn't matter) but essentially a fiat representation asset on a Bitcoin sidechain which locks in 250 usd of bitcoin of 1 Bitcoin. The sidechain algo calculates +/-40% volatility during the previous 12 months so allots 200 bitusd tokens that are pegged to the value of the usd fiat.
4) Consumer now has a wallet with security assets backed by BTC and straight BTC (200 worth of  bitusd and 1 bitcoin)
5) Consumer can now make purchases using the security or bitcoin depending on which is accepted or more advantageous at the moment. (I.E.. if BTC is up spend the BTC, if not than spend the bitusd.


When the timelock is mature the user has several choices :

1) If Bitcoin has increased in value above the initial purchase price the algo would than calculate the previous volatility average and allow the user to either receive a dividend of the difference in BTC, a securitized asset like bitgold/bitusd/bituero/ect , or they can receive all their BTC back and the appreciation with a buyback.

2) If Bitcoin has decreased in value below the initial purchase price the algo would  than calculate the previous volatility average and allow the user to either buy the difference to keep their securitized asset valuation or forfeit their deposited BTC which will than be sold on a trustless decentralized exchange for any other of the sidechains securitized assets.

This would all work fine assuming Bitcoin survives.

Anybody is free to steal this idea and make it your own or modify it as long as you do so for the good of the community....

oh my bad you are absolutely correct not sure why but i always thought you couldn't deposit btc and lock in the dollar amount on most exchanges, i thought only a few like btc-e did that but you had to sell those coins so ultimately lose money and never really trusted those site either.

Actually it would be nice to have a way of locking the dollar amount in our desktop wallet for instance, being able to stabilize the value without using a third party that send your info to DEA

@albert11

I love this idea, and also how you think! I have been saying for a while that there needs to be a way to get the consumer to use BTC without having to even think about it. Without even necessarily knowing they are using it. It is the "killer app" and so far, your dead simple idea is the closest thing yet.

There are hurdles to pass though, not easy ones either. Two I can think of are;

a) Regulation. Arduous, expensive, painfully slow, could run up against better funded opponent lobbies... regulation is huge and tough. Never mind the banks...Many true BTC believers, even, will hate hate hate the very notion. regulation could very well strangle your baby to death. just sayin~

b) The "holding $ on an exchange" part. This could be very problematic. None of the exchanges seem to be able to actually hang onto your "held" funds. I try to never leave anything on there for long, you are always taking your chances, if they don't get hacked, or shuttered by the (ach) regulators, then they outright abscond with the $ and that's the end of that. Not saying you have anything of the sort in mind, just that it has happened so many times that nobody has any faith left, BTC believers and non BTC users alike.

I like your enthusiasm, its the start of many a great career, but I'm also betting that these sort of apps are already in mind by the big players, they simply need regulatory approval and security0.2 first.

Coinbase already does this with their instant buyback option -
http://blog.coinbase.com/post/89402160917/buyback-bitcoin-after-checkout

The problem is due to state laws ... the new btc needs to be ach's to you which takes time, but at least you lock in the dollar amount minus the 1 % fee ...with the MSB licenses per state they can keep fiat in your coinbase account which allows you to buy btc for free now and 0.25% in the future but only in certain states for the moment ... this isn't just a problem with the US as laws and regulation vary country per country and it gets quite complex...

I like the way you are thinking but your idea forces people to keep most their funds in fiat which doesn't help bitcoin grow and become more stable naturally... you are essentially turning bitcoin into a decentralized payment protocol and removing the amazing properties of being a disinflationary currency.

What i was proposing is no different than running an exchange with this app on top, owner would have to have a licence and be registered as a money transmitter.
If i hold $ in my coinbase account, say i want to buy a coffee for 2$ i can just buy 2$ worth of bitcoin instantly on coinbase or an other exchange and send them to the merchant, this way i am not subject to btc fluctuation, my idea is to make this process more efficient and instant.

does ripple have such system integrated ? can you elaborate on bootstrap cash? im not familiar with this

Bitcoin should become much more stable over time and already is a better store of value than certain Fiat currencies.
The legal issue won't go away, and states have a long history of going after and attacking anyone that competes with them.
As far as explaining you the intricacies of the convulted legal system in the US it would take to long and still not answer the question
as the US doesn't even follow their own laws.

Any devs that work on such a wallet that you propose should do so in secret like satoshi, because making a wallet which breaks the law
with every transaction would certainly get you a lot of attention, and in their eyes much worse than wallets like -dark wallet that just focuses
on privacy.

His idea is than answer in the short run to bootstrap cash without a bank that is stable, but that is what ripple and i thought tether are already doing.

@funtotry

how do you think bitcoin will become stable over time?

I really don't see what will bring the masses to adopt it before volatility is solved, e-commerce maybe?


@inBitweTrust

I'm a bit confused about these licences, why do coinbase needs to get approval from so many states?

I live in europe, my country doesn't have any specific regulation in place and was allowed to buy BTC at coinbase.


the best would be an app doing instant conversion/payment using a decentralized open source exchange that would be a brilliant piece

Its not a bad idea , but would be illegal in many countries. The problem is getting all the licensees per each jurisdiction would take a lifetime. (Coinbase has only received 13 states thus far after a year and they have spent plenty on the effort) Additionally , we want to encourage people to hold more BTC and not fiat.

I like the way you are thinking though.