Since the discussion has moved onto Bitcoin / OpenSim, I thought I'd post an update on the work I've been doing to integrate them.
This is my money server, which just about works, but not yet securely:
https://github.com/edmundedgar/Mod-FreeMoneyI'll post another announcement when it's finished enough for people to install on a non-experimental basis.
It's based on a module originally designed to do PayPal transactions, and I've kept the PayPal functionality in there (you can turn it on or off in config). I'm hoping this will make it more attractive to grid admins who don't know enough about Bitcoin yet to bet the farm on it.
It doesn't handle any of the user's money - it just keeps a list of addresses for avatars, prompts them to pay the appropriate address and delivers their inventory when the payment is complete. It has functionality built in to use
www.coinapult.com to pay people who don't have a Bitcoin address registered yet, but that's not currently usable because whoever did Coinapult has dropped off the face of the earth and won't issue an API key.
I think this will be quite useful, but there's still a bit of friction in the payment process - you have to click "Buy" in the viewer, then follow an open URL link, then pay an address either using a bitcoin:// URL or by copy-pasting into your client / e-wallet.
Taking the friction out of the process completely involves hacking the viewer (a bit tricky) then getting everyone to install it (potentially very tricky). But I think this should be the ultimate goal. If anyone can help with this, please let me know.
What I'd like to do for now is to take out _most_ of the friction by making it possible to authorize the money server to tell your wallet to make payments, for a limited time, up to a maximum amount you can specify. My current thinking is to make a hacked version of a client like Electrum and build that feature in. It could also be done with a separate bit of software in the middle to bridge your Bitcoin client and your viewer. Likewise, if anyone can help with this (say hacking Electrum to make an "Electrum OpenSim Wallet" version) please get in touch.