Quote from: Zeilap on February 25, 2013, 11:34:29 PM

When I say attack, I don't just mean hacking, in fact, I see hacking is the smallest problem. Undermining people's trust is a much better attack. If a large number of people lose a significant amount of fiat and/or bitcoin, then it still looks bad for Bitcoin from an outsider point of view, even if the cause was nothing to do with the Bitcoin network.

For instance, it would be easy to set up a system like you suggest, get as many people as you can to deposit, and then delete your private keys so that the funds are impossible to retrieve, and claim you got hacked or some other story. Or, for added effect, delete the keys and tell everyone that's exactly what you've done (assuming no legal ramifications) just to add insult to injury.

If the Japanese government decided that MtGox was doing something it didn't like, like enabling money laundering, it could force MtGox to cease trading and seize all of the fiat and servers.
Anyone with an account there would potentially lose everything in their account, pending investigation.
I don't think that people would shrug it off and move to another exchange - they'd seriously consider quitting Bitcoin altogether if they lose significant money or have to fight accusations of money laundering.

This doesn't sound like you are specifically talking about clearing houses, but rather questioning the stability of the Bitcoin concept overall due to part of the system using exchanges like MtGox.

The answer to that is the same as it has always been. One exchange (or incident), or what happens with it, doesn't equal Bitcoin in its entirety. MtGox and other exchanges have been hacked in the past. People have lost money to hacks, scams, and mistakes. Still Bitcoin continues. However, people (hopefully) learn and take precautions to guard coins better, which I think has happened.

Quote from: MoonShadow on February 26, 2013, 01:39:30 AM

While I agree with the perspective of the OP, the greater gain would be to develop some kind of standard overlay network, across which many smaller BCH's, wallet services, exchanges, etc could interact off of the bitcoin network; and periodicly settle up upon the main blockchain. ...

I like this direction too although I'm not sure how to implement it. It sounds like decentralized accounting which I think would be great, but it seems to me more practical to set up private controlled servers.

Quote from: organofcorti on February 26, 2013, 01:52:50 AM

Quote from: MoonShadow on February 26, 2013, 01:39:30 AM

While I agree with the perspective of the OP, the greater gain would be to develop some kind of standard overlay network, across which many smaller BCH's, wallet services, exchanges, etc could interact off of the bitcoin network; and periodicly settle up upon the main blockchain.

This sounds like an interesting idea.

I started to wonder if daughter alt chains (specifically made for the task) could provide the off network transactions, with the main bitcoin network remaining only to periodically combine the last n txs from a daughter chain into blocks. This way a client would only need to keep a copy of the chain to which they were subscribed. Then I realised that each daughter chain would be less secure than the main network, and since this is not something of which I have an indepth understanding, there will probably be other reasons this can't be done.

Right, I agree that probably wouldn't work. Block chains are not ideal for transactions which is the subject of this thread. Using a block chain requires waiting for confirmations, and then the other considerations of dealing with security by adequate hash rate, etc.

Quote from: organofcorti on February 26, 2013, 01:52:50 AM

So maybe alt chains (if only the term "alt chain" didn't have the connotations it unfortunately has). If the block size problem becomes an issue for miners or users, alt chains like litecoin may see greater use. Or maybe geographically local alt chains that are otherwise identical to bitcoin?

Bingo. You're very close to a proposed solution for the block size issue I plan to write up this week.

Quote from: MoonShadow on February 26, 2013, 01:55:36 AM

I hope not. Part of the benefit of bitcoin is the network effect, which is damaged, not improved, by the growth of alt-coins. ...

Not true. I plan to detail why in the write up I mention above.

Quote from: markm on February 26, 2013, 08:20:19 AM

Litecoin also has four one-megabyte blocks per ten minutes, doesn't it?

So already offers four times as much transaction-space as bitcoin? ...

Yes, but 4 times more than 7 transactions per second is still not enough.

Quote from: markm on February 26, 2013, 08:20:19 AM

...
I am also not convinced that "one world currency" constitutes "decentralisation" of the world's financial systems.

Possibly it is better to be able to move elsewhere each time the powers that be grab control of some huge majority of the money in any particular system, maybe even go for agility where they are constantly on a treadmill trying to grab a mjaority of more and more and more new systems until maybe in some distant era they will realise no matter how much they want to control everyone, some people will (one maybe hopes?) find some way to retain some freedom despite them.

-MarkM-

Bingo. I plan to describe this in the write up I mention above.

Quote from: giszmo on February 26, 2013, 02:00:08 PM

I read the OP and BCH sounds like hosted wallet to me. The hosted wallet used by the reddit bot allows people to send bitcoin off the chain. If now gmail also had such a bot and the people running these bots were the same or agreed on an API, you could send from a@reddit to b@gmail off the block chain and in case these are two entities, they re-balance with one transaction per day or week.

Sure, this can and will be done (I programmed a facebook wallet that allowed you to accept it as a facebook app and then you could charge your balance via the block chain and send to other facebookers off the block chain. Simple didn't go life for lack of design and fear of getting hacked).

Yes, that's essentially all a Bitcoin Clearing House is - a way for one user to send bitcoins to another user while both of them have accounts somewhere that are linked in a way enabling the transfer to happen off-chain.