Can't we create a trustless gateway using the current ecosystem?

[gn1]

It has to be reversible.

I'm not technical so I can only come up with ideas, but can't the blockchain hold onto the private key of the BTC address where nobody else can see, and use it to unlock it whenever the trader tries to redeem his/her real BTC?

I was imagining  a cloakroom type of mechanism, where you hand over the receipt when you go home, and you get your coat back on the way out.

[noisy]

If the blockchain can issue such IOU and lock up the real BTC,

How is 'the blockchain' supposed to lock up real BTC?

What about https://en.bitcoin.it/wiki/Proof_of_burn ? But I am not sure whether this kind of irreversible lock will have economical sense

Second approach: I am also wandering whether multisig could help. Real BTC funds would be secured by two private keys. One private key would be from the issuer, who would send his public key to the network. The second public key... would come somehow from the bitshares network.

Is it possible, that each witness would have only some part of private key? I am thinking about the way... that private key of bitshares network would be used only when witnesses will have consensus...i.e. that there was a transaction, and the issuer want to withdraw his bitcoins.

To be honest, I am not 100% sure, how multisig works... so please be gentle and explain me, what in this idea is wrong, if this is actually impossible.

[monsterer]

If the blockchain can issue such IOU and lock up the real BTC,

How is 'the blockchain' supposed to lock up real BTC?

[ebit]

 

[gn1]

Isn't it possible for the BitShares blockchain to issue an IOU, called something like BLOCKCHAINBTC, that is 100% collateralized by real BTC?

If the blockchain can issue such IOU and lock up the real BTC, then we don't have to worry about Blocktrades.us or Openledger getting Goxed as a Gateway.

Traders can then freely enter and exit the BitShares system without worrying about counterparty risk because the blockchain will not run away with funds like humans do.

Currently, I am having a hard time imagining the BitBTC:BTS market growing efficiently because the only way the supply of BitBTC can grow is when somebody shorts BitBTC. But look. Who will be the first one to short BitBTC in such an illiquid market? It's too risky compared to its reward. There are people who want to buy BitBTC, but there is not enough people that is willing to short BitBTC and match that demand. Hence, the supply of BitBTC will not grow, and trading can't take place.

If blockchain can issue a collateralized IOU, then we don't have to wait for the BitAsset shorters to enter the game. We can quickly build up on the orderbook using the affiliate program.

Let me hear what you think.