Quote from: Jessynoo on June 23, 2011, 07:28:25 PM

Quote from: Blackhawke on June 23, 2011, 06:23:19 PM

Well, that's what I was suggesting. That the exchange have its own block chain made up of buy/sell combinations, perhaps with each ID secured by a GPG key if needed.

I'm sorry I don't read your last post as such. Let me know if the following is indeed what you had in mind.

I think we're getting closer. (Pardon for cutting your excellent post off, but it's too long to quote without it being rudely long.)

I wasn't suggesting a bank or some other kind of holding entity, however. The idea of OTC trading, after all, is that there is no bank. The counterparties "do the deal" themselves, as it were. The only thing the peer to peer network would do is escrow the transaction by not allowing one side of the deal to go through without the other also going through.

To give you an example: Let's say you agree to buy ฿10 from me for $150 USD, and you're going to pay me via PayPal. Our clients having the ability to escrow both sides using the bitcoin API on my client and the PayPal API on yours. I put up my ฿10 and the client places it in escrow, brodcasting a unique code, part of which is the transaction code for the trade, and part of which is unique to my half of the transaction. (Note that the bitcoins are still technically mine, but now I can't get at them.) You issue a pay order in your client via PayPal and your client broadcasts another code, part of which is the transaction code for the trade, and part of which is unique to your half of the transaction. Finally, once the PayPal API confirms a completed transaction, meaning the $150 has been moved to my PayPal account, my client releases the funds and moves them into your wallet. Both clients issue a completed code for the completed transaction, which can then be confirmed using "mining."

No bank necessary.

(Note that, I use "you and I", but in reality, the two counterparties would probably be matched by the clients based on bid and ask price, not "face to face" -- email to email, or whatever -- negotiation.)