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.
Wait a minute.... I thought we were meant to be avoiding repeating the mistakes of the bank?
The banks don't make mistakes, they are the problem. They are huge, centralized, fraudulent, corrupt power centers.
From what I understand, it requires you put trust in people. For me, the strength of Bitcoin is that you don't have to trust people, if they send you the coins, you have the coins. In this system, what's stopping someone saying "okay, I trust Anu for $20" and then anu just not coughing up that $20 when required?
You have no reason to trust me. Do not grant me credit.
Bitcoin and credit money (ZR) are complementary - they solve different problems. The strength of Bitcoin is that it is zero trust. The strength of ZR is that it can replace the banking system's role in moving in and out of fiat.
The whole benefit of an exchange, for me, is that I don't need to know anyone (other than the exchange) I can just send my money, buy some coins.
You don't need to know the counter party. You need to know your friends.
Also, based on reading user experiences, it seems this is even more reliant on critical mass for success, yet it's incredibly hard to get started with nobody else there. That seems a bit paradoxical. Have you any way to incentivise people using this? Also, if you're only streamlining relationships with friends, then why do we need this system in the first place? e.g. it requires me to say "I trust anu" but if I already trust anu, why do I need zeroreserve? Or is the main focus on trust chains formed including people you don't know (which would be hard to do manually arrange)
As you state below, its about chains of trust. The purpose of ZR is to route payments through such chains without the need for anyone (even the friends) to know who the seller and the buyer are.
As to the critical mass - that is indeed the problem and if ZR does not achieve critical mass, it will die.
If the focus is on trust chains, wont things like adding bots as friends, or adding the pirate party as a trusted party be bad?
In the context of ZR, a friend is defined as "An entity
you trust for X amount of credit". So in the context of ZR, your drinking buddy may not be your friend, but your business partner may be, even though you personally dislike him.
[EDIT] And yes - a friend does not need to be human. Can be an organization, a trading bot, or whatever.