An exchange where balances are stored in users' wallets?

RocketSingh

legendary

Activity: 1662

Merit: 1050

Quote from: Undermood on April 03, 2015, 10:23:54 AM

The trade is carried on chain, like www.shapeshift.io is doing. They claim that Buy Coins Instantly No Account Needed.

Shapeshift.io is fine for bitcoin/altcoin trading. But, when u want to trade FIAT, u can not do it on chain. They are talking about bitUSD, but that actually require some central authorities to issue those bitUSD. I have read the whitepaper of bitsquare, openbazaar etc. None of the so called decentralized exchanges dealing with FIAT have actually been able to make the system completely trustless, because it is simply impossible to take a centralized token like FIAT working in a decentralized trustless system.

Undermood

legendary

Activity: 950

Merit: 1000

The trade is carried on chain, like www.shapeshift.io is doing. They claim that Buy Coins Instantly No Account Needed.

Whitehouse

sr. member

Activity: 448

Merit: 250

What you're talking about there are decentralized exchanges. I don't know of any functional ones currently in operation but I believe there are several in development and I'm sure they will become quite popular over time. There are also decentralized marketplaces like openbazaar which could revolutionize tor markets and even maybe rival ebay one day. .

RocketSingh

legendary

Activity: 1662

Merit: 1050

Quote from: ?? on ??

Quote from: Victor Beckham on April 02, 2015, 07:35:32 PM

It seems www.100bit.co.in is offering exactly this...

-snip-

Yeah I have never heard of that site and it looks sketchy, I wouldn't register there.

Sketchy ? Why ? 100bit.co.in is among the list of transparent exchanges. I have used it too. Volume is low as it is new. But their operating process is quite transparent. I like the feature that, unlike LocalBitcoins, we dont need to keep our coins deposited at the exchange.

Victor Beckham

full member

Activity: 243

Merit: 100

It seems www.100bit.co.in is offering exactly this...

Quote from: Lorenzo on April 02, 2015, 07:26:39 PM

Would it be possible to create an exchange where funds are stored in users' own addresses with users having full control over their own private keys like Blockchain.info? The exchange would be able to confirm the balances contained in these addresses but not have any control over them and the exchange would act as an escrow to facilitate trades. The consequences of such an exchange being hacked would be greatly minimized since only those transactions happening at the exact moment of the hack would be affected.

Firstly, would this work? For altcoins I suppose it would but how would this work for a fiat-BTC exchange? There would need to be a way to minimize the risk of chargeback fraud as well as a way of transferring fiat in a timeframe that doesn't take days/weeks to clear so traditional banking probably wouldn't work.

Secondly, even if only altcoins were traded, trades would take minutes to confirm instead of milliseconds as they do right now. There would be a bottleneck effect since the speed of trades would be limited by the coin with the slower block time. In most of these cases, that coin would be Bitcoin. Do you think that this would be a significant disadvantage or not something to worry about?

Lorenzo

sr. member

Activity: 406

Merit: 250

Would it be possible to create an exchange where funds are stored in users' own addresses with users having full control over their own private keys like Blockchain.info? The exchange would be able to confirm the balances contained in these addresses but not have any control over them and the exchange would act as an escrow to facilitate trades. The consequences of such an exchange being hacked would be greatly minimized since only those transactions happening at the exact moment of the hack would be affected.

Firstly, would this work? For altcoins I suppose it would but how would this work for a fiat-BTC exchange? There would need to be a way to minimize the risk of chargeback fraud as well as a way of transferring fiat in a timeframe that doesn't take days/weeks to clear so traditional banking probably wouldn't work.

Secondly, even if only altcoins were traded, trades would take minutes to confirm instead of milliseconds as they do right now. There would be a bottleneck effect since the speed of trades would be limited by the coin with the slower block time. In most of these cases, that coin would be Bitcoin. Do you think that this would be a significant disadvantage or not something to worry about?

Topic: An exchange where balances are stored in users' wallets? (Read 555 times)