[Opensim-users] Bitcoin [was Re: Opensim-users Digest, Vol 51, Issue 3]

[Mimetic Core]

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.
>
>