Quote from: davos on December 19, 2013, 05:38:18 AM

Quote from: axilla on December 19, 2013, 05:03:06 AM

maybe i'm not connecting the dots, but in a decentralized exchange, how do we get money from BTC > Fiat > In Hand?

You would only connect to the network through people to whom you have extended some amount of credit (ie people you would trust with money - be it 0.005 BTC, $500 or 50 kilos of fresh fish... whatever currency and in whatever amount you trust them to pay you back if owed to you) - likewise they are only connected to people they would trust.

Imagine there are two books - one is the BTC order book and the other is the debt record. When you buy bitcoin on the order book, you are paying with the credit granted to you by people who trust you to pay them back - all along a chain until it gets to the BTC seller. If you are owed money by your friends, you can collect it - if you owe money to their friends - they can collect it. You deal with BTC more or less anonymously (address to address) and with fiat on a friend-to-friend basis - if I'm understanding correctly.

Exactly. Ideally, you don't always need to get hold of the actual money - you treat your ledger with your friends like money. Even though it is only fiat. You see, there is not much of a difference if the bank owes you money or your friend owes you money.

For example you buy a Bitcoin. At that point you owe a friend $568 (price at the time I write this), creating that money. Later, you sell your used race bike for $600. At that point your friend owes you $32 and the $568 are destroyed.

This is exactly the same as the banks do: Creating and destroying fiat money. Should this catch on, we, the people can take the banking business out of the banks hands and the wealth the banks skim from us remains in our hands.

My hope is that some years down the road, people entirely walk away from the banking system and ZR only needs to support gold (and some other commodities) and Bitcoin. If the FED is simply forgotten, there is no need to abolish it, as Ron Paul demands. Dito for the ECB/BOJ/PBOC....