I've been thinking for a while about how to create a currency for the read write web. And I thought I'd share some preliminary ideas. Essentially this is bitcoin+ripple translated to the Web.
Introduction
For those not familiar with the bitcoin concept it's essentially a distributed ledger where each subject is a primary key in the ledger and can hold 0 or more coins. Coins are transferred using a signed and timestamped PKI transaction log from one address to another, in a distributed data base.
I think using a portable URI for addresses is the thing that makes most sense. So possibilities for this may be a URN, or schemes such as di: (digest) or ni: (named information). Anyone should be able to generate an address, and they should be wide ranging to improve liquidity.
Balances
Balances can be calculated by summing all inputs to that address. You can additionally keep a state of balances using the payswarm vocab, or perhaps, goodRelations
Transactions
I think a distributed data base could be maintained using read / write web technologies, such as HTTP POST / PATCH or SPARQL Update. The signatures could be added using the WebKeys spec.
There are challenges associated with maintaining a distributed database. I suggest we start small and whoever opts in can become part of the verification process. There are two recent methods for mitigating race conditions an important one of which is called "double spend". One is proof of work, the other is consensus based on a unique node list. I would suggest using both techniques. I'd like it to be possible to use both HTTP (with self signed certificates), HTTP, and (secure) websockets too as the transport layer.
This tends to be the most contentious point, with people tending not to like the "premine" concept where you allocate coins to yourself. However companies like opencoin have successfully rolled out multi million or even billion dollar premine schemes. I would suggest coin creation in line with bitcoin, where they are created proportionally to those maintaining the integrity of rhe shared database.
Given the nature of the system, it may be easy to spam the network with micro transactions. As such there should be a transaction fee where those that pay the highest fee are prioritized.
I think it would also help to have a trust and reputation system added to the process, such that honest nodes benefit from acting honestly, and nodes which are dishonest or not up to date are considered less dubious. The nature of the function should be that it's exponentially harder to gain trust after you have a certain score. Similar to chess ELO ratings.
I think there should be a deep integration with web principles and linked data to promote an app eco system and allow unexpected reuse. Also it should allow extensions such as the ripple protocol's trust lines, IOUs and distributed markets, which are not initially scoped out. Reusing existing concepts such as the bitcon blockchain (e.g. so-called coloured coins), ripple ledger, opentransactions, payswarm and web credits should all be doable.
Just some food for thought. Criticisms welcome. Please let me know if you're interested in running a node, and maybe we an get a reference implementation going, as proof of concept.