Now everyone may easily participate in the Loom phenomenon quietly sweeping the globe. Words alone cannot express our thanks but “thanks Patrick”. Here is the link to that amazing code. http://github.com/chkoreff/Loom

Now in addition to paying to normal permanent contact points, you can also pay to “[Cash: New]“, which you will see in the contact drop-down menu. When you do this, it creates a new temporary contact and moves the asset there. You then copy and paste the token and send it to the payee.

When the payee receives the token, he logs in and pastes it into the “Receive Cash” field. The received assets appear and he can claim them normally with a single click.

This new “cash” feature is handy when you want to pay someone but don’t expect to interact with him very often in the future. This way, you and the payee can avoid the step of adding a shared permanent contact point to your folders — which you would probably never use again. It’s also useful for quick invitations — just pay 100 usage tokens to “cash” and send the token to the invitee.

Of course, when two people *do* pay each other frequently, the shared permanent Contact point is still the most convenient method by far, since the two parties don’t need to copy, paste, and securely send a brand new “cash ID” every time they pay each other.

Both modes of usage are highly convenient in their own right, depending on the circumstances.

(thanks Patrick)

There will be more on Loom.cc in this months’ DGCmagazine.

Before we discuss what Loom is, it might be a good idea to explain what Loom isn’t.

Loom isn’t

• digital money
• an exchanger
• an exchange provider
• a way to trade physical assets
• a system for tracking the ownership of assets

Digital Money — Though Loom has been optimized to facilitate the creation of digital assets, it is the user who creates them. Loom is totally agnostic as to the nature of assets created by the user.

Exchanger — Loom is not a market maker and takes no position in exchanged assets or other items.

Exchange — Loom does not provide simultaneous exchange services. It only provides one-way transfers. The other half of an exchange must be performed in a separate transaction either within or without Loom.

[Editor's note: Actually, the author of Loom has been planning a two-way internal asset exchange mechanism known as a "Vending Machine" for some time. It should be rolled out within a few months, probably by Sep 2009.]

Trading System for Physical Assets — The map is not the territory. To the degree that Loom facilitates the transfer of assets, the only assets that can be transferred are digital ones. The trading of digital assets may or may not result in the exchange of real-world assets.

Asset Tracking — To the extent that Loom is involved with assets, it only facilitates their transfer. It keeps track of nothing except digital locations.

Loom Is

Loom is an infrastructure for privately hiding and revealing secrets.

Sorry, but that’s it, that’s the whole enchilada. Doesn’t sound very impressive, does it?

The Elegance of Loom

Okay, you can reveal a secret to someone without using Loom. You can send an encrypted message or just whisper in their ear. With Loom, however, the secret gains a sort of persistence, transferability and flexibility not otherwise possible. Of course, it is optimized for monetization of digital assets and to facilitate their use in digital commerce. It can also be used, however, for whatever other interactions users invent. A secondary benefit is that Loom does not create a useful audit trail for snoopy third-parties.

Now remember all the things we said Loom isn’t? Well guess what. Loom can also assist in performing such functions.

Digital Money — While Loom isn’t a form of digital money, it facilitates the creation of digital money by providing an easy way to monetize digital assets.

Exchanger — Loom is not a market maker for digital assets. However, it does provide a way for exchangers to do business with their customers. Just as important, exchangers can use Loom to “lay off” transactions among themselves quickly, easily and privately, thus increasing market liquidity and efficiency.

Exchange — While not an exchange, per se, Loom is a simple and discreet way to perform part or all of exchanges of digital assets.

Trading System for Physical Assets — Loom can assist in the direct trade of digital assets only. However, this does not mean it cannot play a role in the trade of physical assets. Digital assets such as the various forms of e-money, usually represent something tangible in the real world. So too, can it be with digital assets transferred in the Loom system. As in any use of digital assets, it ultimately becomes an issue of trust.

Asset Tracking — This is something that Loom really cannot do. In fact, it is something it should not do. One of the major appeals of Loom, is that it provides its users with privacy in their transaction and a large degree of anonymity.

Security

Loom’s security is based on three elements, the mathematics of really large numbers, open source software and server operator honesty.

Math — Loom hides a client’s secret in plain sight in one of 2¹²⁸ (about 3.4×10³⁸) digital locations. If you can guess where someone has stored his secret, it’s yours. So how easy is guessing?

Let’s assume we want to hid a secret in a physical space. One cubic millimeter is pretty small but at least visible. So lets turn the entire bulk of the earth into one cubic millimeter information containers. Now imagine the problem trying to guess where a secret is hidden. Is it in a millimeter cube of iron at the center of the earth? Is it in a piece of ice at the top of Mount Everest? How about in that mug of beer in front of you at the restaurant? Finding that one particular cube is—for all intents and purposes—impossible. But there are far fewer than 2¹²⁸ cubic millimeters in the earth. To have that many cubic millimeters would require about a third of a billion earths. Get the picture?

Open Source — No software is perfect. Proprietary software is created and sold on the basis of “security through obscurity.” If no one can see the source code, then their will be no security breaches. Unfortunately, the history of proprietary software has long put the lie to that belief. Crackers have, do and will crack proprietary software. If you are running Windows, you are continually being sent security updates. These are almost never prospective. Each security update comes after the fact. A malicious cracker has found and exploited a flaw. Some user paid the price with their money or their privacy.

Open source software is predicated on the demonstrable fact that there are more white-hat hackers than black-hat hackers. As a public service and for bragging rights, the white hats—on their own time and dime—pore over the source code of open source software, testing and probing in search of possible security flaws. When they find something, they shout if from the rooftops and it gets fixed immediately.

Loom is not Enough

Loom is very useful within in its primary function. However, there are ancillary services that could improve its usefulness—especially for e-commerce. This is not a problem, but an opportunity. The existence and use of Loom create real opportunities for entrepreneurs to serve niche markets. Independent businesses that provide escrow, insurance and guarantor services immediately come to mind. However, the opportunities are probably endless. If you can figure out a way to better serve the Loom community, users will beat a path to your doorstep.

References

Volume of the earth is listed as 1.0832073 * 10¹² cubic kilometres at Wikipedia.

I have added storage fees to Trubanc.

One of the drawbacks of Loom is that there’s no way to make money from Loom itself, except for small amounts of one-time income from new users for asset tokens. In order to make Trubanc a money-making proposition for the asset issuers, I have added storage fees. I expect that most Trubanc assets will be backed by precious metals in storage. It makes sense for the issuer, who must pay for the space and security of that storage, to be paid a small periodic fee. He can now set a yearly percentage rate charged for all users of his asset.

I’m going to describe the new feature with an example. I’m assuming two users, John and Mary. John creates a gold-backed asset, named “John GoldGrams”, with a storage fee of 1%. The market will determine how much storage fee is viable. The Free Lakota Bank charges 1/20,000 per month, or 0.06% per year. C-gold charges 1% per year. E-gold too. Trubanc allows the asset issuer to decide what to charge, and to change it at any time.

Rather than keeping track of an average monthly balance, and assessing the storage charges monthly, Trubanc includes storage charges in every transaction, paid by the holder of the asset. So when you make a spend, you pay the fee on your original balance for the amount of time it’s been there. And when you accept a spend from someone else, you pay the fee on the accepted amount, for the time that it’s been in your inbox. Trubanc keeps fractional amounts on fees, so that these small amounts can add up for the asset issuer.

Read all about it and see all the screenshots here.

Arto has been hard at work integrating digital currency payments into the popular Drupal CMS system.  Check out his work at, http://drupal.org/project/digitalcurrency

He currently has some shopping cart integration done for Pecunix, Liberty Reserve and Perfect Money but has also been working on implementing programmatic access (that is, providing APIs for Drupal developers) to the aforementioned issuers as well as to Loom.cc (see the attached random screenshot)  Yes, that’s correct, Loom, check it out.

Drupal Digital Currency Settings

Arto’s goal is to provide a foundation from which Drupal-based sites and systems (automatic exchangers, private markets, community currencies, etc) relying on these payment systems can be rather easily built by developers familiar with Drupal (that’s a very big talent pool). The shopping cart integration also means that the aforementioned payment methods will soon be available to any of the existing thousands of Drupal/Ubercart merchants who wish to accept them. That is a big neighborhood. There’s much code still to be written, but enough already existed that Arto wanted to share that with us and alert us to what’s coming down the pipeline.

Many thanks Arto for your hard work and we look forward to any updates and innovations you can offer. Cheers. Here are a couple more shots of Arto’s work.

Loom API

Drupal Digital Currency Checkout

Like Loom, it allows anyone to issue assets (digital currencies). Unlike Loom, which relies entirely on (very good) obscurity for security, Trubanc’s digital signatures allow the bank and the customer to prove to each other that they agreed at a particular time on their balances. It does this while allowing destruction of transaction history for closed trades.

Trubanc will initially provide server-based trading. Eventually, it will provide digital checks and bearer certificates. These, however, WILL require permanent storage of transaction history.

Check out Trubanc here and thanks to Bill for all the hard work.

http://billstclair.com/blog/trubanc_web_client_public_beta.html

• BiZiBuxx at BiziBee Florist (also see BiziBee Floral )
• id: e27e15aa6677bfd7a1e55ccae177fb0f
• scale: 2
• precision: 3
• name: BiZiBuxx

There is lots of good news coming out of the Loom lately. Check out how many different issues are now available!

Also Patrick tells me that, “the internal architecture of server code changed to multiprocessing” which translated means, “the standalone loom server code forks a new process for each request. Also, the locking can be more granular, so lots of “moves” can happen simultaneously with no interference.”

Loom is a value transfer system or network.  Each user can if they so desire, create their own currency and use it for whatever they wish.  There are a number of these issues already out and in use, some private and some very public like Graham’s GoldNow Gold Grams.  Read more on it over on Loom.cc

To test out the basic version, you can try our video tutorial its two minutes of pure fun…two thumbs up.

There was also some good information on ‘electronic money’ published over at http://www.falura.hu/en/ and it’s worth a look.