(i'm re-posting my last message for the digest reply haters)
just to add another layer to this discussion, at least from a historical perspective, here is a radio piece NPR ran back in August on Planet Money about Bitcoin and its origins. i only reference this because it's an interesting story and regardless of it's relationship to OpenSim (though i would love to see it become the standard currency for virtual worlds) it has a whole lot to do with the growing decentralized open source mindset [coughs]...
http://www.npr.org/blogs/money/2011/08/24/138673630/what-is-bitcoin - Core/Jason On 11/4/2011 7:54 PM, Edmund Edgar wrote:
OK, I think there's a bit of confusion in the Bitcoin bit of that discussion, so it might help to run through what Bitcoin is and why it would might be useful in the open metaverse. (But not for the OP, who needs play money.) - What is Bitcoin? - Bitcoin is a decentralized, peer-to-peer electronic currency. There is no central organization controlling Bitcoins. Records of what money has been spend are stored all over the network, by the computers of people who participate in it. Whether a Bitcoin is genuine or not is judged by rules in the Bitcoin client software, which is free and open source. See http://www.bitcoin.org for an explanation of how it works, how money is generated, and how the system prevents you from spending the same money twice. - Why are people interested in Bitcoin? - Technology has made most kinds of interactions between people freer, more open and more decentralized. The exception is money, which used to be based on a decentralized, peer-to-peer model (people implicitly agreed on a particular hard-to-obtain shiny metal to represent value), and has gradually become more centralized and controlled. The practical problem with that is that people like PayPal, who control electronic tranfers, are very nasty to do business with. They take a massive chunk of commission, they can arbitrarily lock your account, and they can shut down people they don't like on a whim, or due to political pressure. This last thing is what happened to Wikileaks; They were easily able to work around attempts to shut down their DNS and their server hosting, but the US government (without a court order or anything like that) was able to stop payment processors from transferring donations to them. There's a lot that can go wrong with systems that need a central, trusted authority, which is why people building the open internet have tried to avoid them wherever practical. - How could this work for the open metaverse - The Linden model is that there's a trusted company that keeps records of all the money. When you make a transfer or a sale, they move the money from one account to the other. We don't like that because it means we either have to trust a company that keeps those records, or - even worse, for someone running a sim - _be_ the company that keeps those records. A better model, that is possible with Bitcoin, is to put everyone in control of their own money. You'd keep your money on your own computer, transfer it easily to another avatar when you want to, and have some way of letting whatever system was in charge of storing inventory that the transfer was happening. If we wanted this could be integrated with the client so that you could make payments and purchases seamlessly in-world, like you do on the Linden grid. This is great for me, because I don't have to put my trust in somebody running a money server, and it's great for people running sims, because they don't have to baby-sit people's money, with all the security and (potentially) regulatory issues that involves. A harder question is how we get from our current software (based on the Linden model) to there. There may be something we can do quicker (like hacking Bitcoin integration into Fumi Iseki's money server) that would get some of the benefits of Bitcoin without going to the full decentralized model.
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