Quote from: Croesus on May 16, 2013, 04:49:11 PM

Quote from: edmundedgar on May 14, 2013, 01:10:08 AM

Thanks, this is getting a bit clearer. Before we talk about Stacey, could you fill in the case where somebody actually calls on Bill's collateral?

Let's say the worst happens, and Bill, the sole proprietor of our pseudonymous online poker room, dies in a car accident shortly after launching the cvToken system. Here's what happens:

Bill's customers notice something is wrong when one day no new bids are placed on the cvToken's distributed auction. Or perhaps Bill had a script doing this, and they notice for some other reason. Either way, they all want to get their money out and Bill is nowhere to be found.

The customers issue cashouts against Bill's collateralised BTC, and when Bill doesn't come through, the escrow seizes control of his funds. Alternatively, Bill's script was simply set to honour all cash-outs. In the former case, everyone gets a proportion of the collateral in ratio to their BillBucks--likely more than the market value. They can take them to a BTC exchange and pull out Aussie dollars.

In the latter case, Bill's script sends each customer one Aussie dollar worth of BTC per BillBuck they owned. The escrow sends Bill's address a proportional amount of his escrow back (typically more than what each customer is receiving). One by one, they all collect their BTC, take it to an exchange, and pull out Aussie dollars. Some weeks later, Bill's lawyer finds his last living heir and hands them an elaborate paper wallet (one half of which was held by the lawyer, the other half of which was found in a safety deposit box upon his death). She follows the instructions and collects the excess collateral sent there by his script, in addition to the profits from his business over the years. A single tear rolls down her eye for the great uncle she never knew.

Does that line up with the understanding you have so far?

OK, so it's regular human-run escrow with some trusted people who have access to the money? (Possibly mitigated by useful Bitcoin features like multi-sig, so the people running the escrow can't steal the money without cooperating with each other.)

That makes sense now, I was confused because for some reason I was expecting something a bit more cyber... And that also answers the riddle of how the exchange rate information gets into the system: The humans in charge of the escrow check it, using publicly available data and common sense.