Post
Topic
Board Project Development
Re: Holy Grail BOUNTY
by
fellowtraveler
on 06/01/2014, 05:33:39 UTC
Quote from: gogodr
There is one problem I didn't get clear with the videos.
If it is decentralized and the servers can't change people's balance, how will someone put dollars into the system?

Let's say my balance is 40 clams.

Then I make a transaction request:

----BEGIN SIGNED TRANSACTION---
===> My current balance is 40 clams.
===> Please send 10 clams to Bob.
===> My new balance will be 30 clams.
---END SIGNED TRANSACTION-----

The server merely verifies and counter-signs. It cannot forge transactions because it doesn't have your private key. It cannot change your balance because your "balance" is just whatever appears on the most recent receipt.

So the server CAN show balance changes -- it just can't initiate them (the user has to initiate them.)

That's all SEPARATE from how dollars get into the system. There are multiple ways that can be done:

1. Have a dollar issuer who is trusted to hold the dollars. Give him dollars, and he gives you dollar units (and vice-versa.) This would work with or without colored coins.

2. Assuming you have that, you can also buy/sell those units from any other user (not just from the issuer.)

3. OR: Create a dollar-based currency where agents provide in/out and post BTC-based bonds to secure that service. That way you don't have some trusted central issuer holding the dollars -- instead you have the dollars stored at the edge nodes, with the reserves stored as Bitcoin in a multi-sig voting pool. This is the Lex Cryptographia idea (google it.)

4. OR: Just store the reserves as Bitcoin directly, in a voting pool, and then buy/sell them using real-world dollars. That way you have dollar in/out functionality, without trusting anyone to hold any dollars (as in 3.) The currency is Bitcoin-based, instead of dollar-based, however. But you can still "move dollars in/out" so it's worth mentioning. The only reason to do (3) instead of (4) is so you can trade dollars against Bitcoins on markets.