Quote from: Sukrim on August 31, 2011, 12:35:26 AM

Quote from: saqwe on August 30, 2011, 09:50:17 PM

Interesting please put the wall at 10 $

This requires 210 million USD pledged by people using this fund (called "bot" by the OP).

No one pledges, pays, donates, gifts, or otherwise spends anything. They get an estimate floor price that they then have the option of adding power to by letting the bot calculate an arbitrary amount in to the floor and suggesting a new floor value.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

Why should it be written in PHP in the first place? You could write it in any language you can program in... actually few people have a working PHP installation on their home PC, so it might get difficult for them to use.

I chose PHP because it is relatively human readable and has a low barrier to entry so that other people can more easily understand and modify the code. It is freely available on all major OSes and integrates easily with web services. Seeing as the web browser and the BitCoin client are the two places most people interact with BitCoin, it seemed like a natural fit to me. PHP's relative ease of server setup makes it simple for a small price bloc to set up together independent of my price bloc, thereby making the code more useful to the BitCoin public. The option to install a PHP server on a computer to take commands from a remote mobile device through a standard browser is a nice feature too, but not necessary, or even exclusive to PHP. Obviously there are security concerns dealing with mobile access as well, but the PHP option gives you convenient access to the mtgox APIs. Any security chain is only as strong as its weakest link, and mtgox already has access through PHP APIs. For the sake of simplicity for users learning the mtgox API, why convolute the process by making the community learn another language to understand the bot? There could be better options here I suppose, and theoretically it could be written in any language as long as the code was well-commented. There are no shortage of cross-platfrom web-savvy languages. Which would you write it in? PHP is just a place to start the discussion, really.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

About this part:

Quote

Quote

2) It requires people to publicly tell a lot of people how much buying power in fiat they have and pledge to use to back Bitcoin.

False. It requires individuals to tell a server how much they intend to put towards backing the BitCoin, and then to listen to the server's recommendation on a price. Because the bot is open source, different people will likely change the math to alter the level of the backing in their particular pool, or to a level they feel is more correct than the server, be it lower or higher. This organic process helps to set the actual floor.

How is this different from:

Quote

Individuals tell a server how much they intend to pay for a Bitcoin, and then listen to the server if there was someone who wanted to sell at this price. Because the server accepts bids + offers, people will likely set their individual prices or - if they think current offers are too high (or low), choose to bid less or more. This organic process helps to establish an actual exchange rate.

?

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

Anyways, telling a server how much money you want to put towards Bitcoin backing IS making it public, or at least making this sensitive information available to the owner of that server.

The first paragraph says the user must listen to the server and agree to place their bid, while the second paragraph says they would have take a sell order at the bid the price the server recommended if someone sold to it. The first paragraph also discusses the user altering the math of the bot, not just modifying the result of the output directly (which they can also still do).

Lets try this again:

1) The bot has no control. The human always has the option to turn the bot off.
2) The bot has no money. The human can only use or ignore a suggestion from the bot.
3) The bot is open source. The human can change the bot's behavior at any time.
4) All bids and asks are already publicly viewable.
5) The only time bids execute at the floor price is in the event of near-total collapse of the market.

The sensitive information is that a few hundred or thousand or whatever individuals placed bids for less than a quarter around the same price. This information will already be easily publicly visible on mtgox, mtgoxlive, and bitcoincharts in the section labeled "Market Depth". All the sensitive data that can be revealed by the bot, all the complex modeling at the bottom of the spectrum that can't be exploited, is already publicly available to anyone with a desktop calculator and a web browser.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

What you want to achieve is to have dozens/hundreds/thousands to put a few dollars towards Bitcoin backing and from that to calculate a safe floor.
This won't work as I already said, as this floor is likely far too low to have any effect (would you pay 1000 BTC for a simple book, just because that's the "floor value"?!) - and fractional reserving only works for banks because they control the money, you don't.
In reality your floor might exist but will be irrelevant then (as it is many magnitudes below trade prices) - OR it can crumble, as everyone can remove funds from the floor at will, if the price gets close.

What I actually want is in the long term for millions to back BitCoin with a few cents. Initially the floor's value would be very low because the currency's current market price is entirely unbacked speculation. I'm not talking about nonsensical fractional backing, or central backing, I'm talking about distributed full backing and the process to bring that to the economic landscape democratically. And yes, that still means that anyone using the bot and it's recommendations has the option to back out of the floor at any time and stop backing BitCoin if they decide it no longer has the value they are backing it with.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

About exploits:
As you control the server (or someone else controls it...) anyone controlling that server can send out bogus data to the owners of this bot.

Which can then be double-checked automatically vs. market depth for accuracy. And of course anyone can use the open-source bot and an off-the-rack PHP install to set up their own price bloc and their own server for free, disproving the server as a sole weak point to be attacked and the theory that I have control over the server and could use it to manipulate price.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

If I now took control of the server and told it, that there are 210 million USD in reserves in total pledged, the bot would recommend to (or even automatically do) trade BTC at a price of at least 10 USD/peice (maybe even nearly 30 USD/BTC, if you take into account that only ~1/3 has been mined yet).

So suddenly 21 million people who were never going to join the one evil bot pool now have, they have each contributed $30.00 and magically the now closed-source bot exploits them, setting the floor at $30.00 against the user's wills in a way they can't verify versus market depth because the bot is written using an ancient voodoo hex, and me selling every Bitcoin ever minted at ridiculous mustache-twirling profit levels, even though I never had them to sell. The bot has mysteriously gained the power to compel people's minds in this example, the market behavior of the entire world has changed, and the ownership of all the BitCoins has been transferred to me to sell off for a quick profit. Of course, not a single word of that makes sense or fits in with even a half of one of the facts. Especially me with a mustache.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

You have a single point of failure in this system and you seem to control it by design. This makes you suspicious, an attack target and a potential scammer.

I suppose the best solution here is to set up a distributed mirror of the server, or make sure anyone can modify the source and run their own variant of the bot/server. Thankfully, that already exists in the design document.

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

Also how would you verify the amount of money that people claim to have without actually getting access to it? I might just happen to have a few billion USD sitting on my MtGox account right now... Roll Eyes

Read the market depth graph. Maybe design the bot to calculate directly from the JSON of market depth data instead from a PHP server and just reinforce the lowest current floor without a recommendation from a server. Of course this gives some big player who is already sitting at the lowest price wall a bunch of free weight in the market, and give him the ability to manipulate the bot pool instead of having the distribution of the backing be democratic, and really describes something more akin to following the low floor than setting an actual backed value.

Of course, if you had a few billion USD and were in the BitCoin market, you could just set a hard floor yourself well above the current bid or ask and stabilize the market instantly. So why haven't you?

Quote from: Sukrim on August 31, 2011, 12:35:26 AM

On a side note: http://blockexplorer.com/address/19CCVDxm53WZuyGvNr4ZaVFgn1kYha4dC1 shows 0 BTC as of now - do you not even trust your own idea as you don't set a bounty yourself but just want the money of others for that simple idea of yours (called currency backing...)?

Seeing as it is looking more and more like I'm going to write the bot myself, I don't see a need to clutter the block chain by donating BitCoins from one of my wallets to another. Since no one else has even voiced an interest in writing the bot, it seems deceptive to put money into the donation wallet to artificially inflate the donation value. I encourage everyone here not to donate until someone at least shows interest in writing the bot and you feel they deserve to be paid for their work (besides me).

The bounty is for a programmer that wants to write the bot and earn BTC, and for people who agree with the idea to pay that programmer for his work. The 1% fee out of the bounty is to reward me for the idea of the bot, otherwise known as my work. It may even be considered dishonest for me to contribute to the pool, since I could just do so anonymously and then take the whole pool once it was donated to, or contribute to the pool for the purposes of getting the 1% to be worth more net, knowing full well that I control the donation wallet and could easily just pay myself back out that money if the bounty never picked up to a point where someone tried to earn it.

At no point have I claimed that I donated to the bot's pool, only discussed the ideas behind the bot on this thread. At no point have I said anything about not believing in this system, and in fact I have expressed and logically defended it over and over already.

You may feel this represents a lack of trust in my own idea (which I've already spent hours and hours writing about in this thread). I would think my trust in the concept is apparent by the fact that I'm here as a proponent of the idea. Please don't transfer your lack of trust in me to me by proxy.

Psychologists call that "transference".