The recent bug make you feel some type of way:
http://www.youtube.com/watch?v=-KKbdErJkiY
"PhantomPhreak been hustlin' trying to make him something
Ain't no telling what he'll do for the bitcoins
Soufflé, he's straight, he write his code
xnova, he's a smooth developer"
Topic: [ANN][XCP] Counterparty - Pioneering Peer-to-Peer Finance - Official Thread - page 474. (Read 1276928 times)
February 20, 2014, 07:51:07 PM
February 20, 2014, 07:42:18 PM
A quick update: We are currently working through things with busoni and the anonymous hacker regarding the security incident. We have essentially extended a reward as well as a security developer-type position to this individual contingent upon us fully settling this issue and the funds being fully returned.
Phantom is currently implementing even more strict transaction validity checking rules as we speak (to among other things, guard against a specificpotential security issue in bitcoind "quirk" in bitcoind itself that the hacker has identified). We are also working on an intermediate transaction database (to lessen the need to do a full rebuild off of bitcoind for all but the most major updates). That all being said, there will most likely be another update out shortly that requires a rebuild, but we hope that this will be the last for awhile.
We have also created two donation addresses:
Bug bounty program: 14Tf35AovvRVURzd623q5i9kry2EW8WzyL
General donations: 19U6MmLLumsqxXSBMB5FgYXbezgXYC6Gpe
We will be announcing the terms of a bug bounty program later today. If you are interested in helping pay for bounties for bugs found, please donate BTC or XCP to the bounty address above.
General donations (to be used with the project at the Counterparty team's discretion) can be sent to the General donations address.
Again, thank you all for your patience on this matter as we drive it to resolution.
Good news! Phantom is currently implementing even more strict transaction validity checking rules as we speak (to among other things, guard against a specific
We have also created two donation addresses:
Bug bounty program: 14Tf35AovvRVURzd623q5i9kry2EW8WzyL
General donations: 19U6MmLLumsqxXSBMB5FgYXbezgXYC6Gpe
We will be announcing the terms of a bug bounty program later today. If you are interested in helping pay for bounties for bugs found, please donate BTC or XCP to the bounty address above.
General donations (to be used with the project at the Counterparty team's discretion) can be sent to the General donations address.
Again, thank you all for your patience on this matter as we drive it to resolution.
February 20, 2014, 07:18:30 PM
The problem is not with XCP anymore. Transactions were reversed and balances have been re-established.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith that the devs & busoni and I think they'll come up with something that minimize the impact of the users. Wait & see.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith that the devs & busoni and I think they'll come up with something that minimize the impact of the users. Wait & see.
Yeah true. Allowing 80 BTCs to be withdrawn without check is not a good risk management.
35000 xcp deposit should also raise some flags too
February 20, 2014, 07:13:14 PM
did anyone try to install the new 0.6 client? all that happens when I open it (after installing https://github.com/xnova/counterpartyd_binaries) is a comand line window opening and closing again after a few seconds...?
The same happened to me. Just build it from source.
i have no clue how to do that
also, are other clients like https://github.com/JahPowerBit/BoottleXCP not recommended anymore since the new 0.6 version with the fix came out?
That's not affected since the client has external reference to counterpartyd so it always checks out the latest code
February 20, 2014, 07:10:13 PM
The problem is not with XCP anymore. Transactions were reversed and balances have been re-established.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith that the devs & busoni and I think they'll come up with something that minimize the impact of the users. Wait & see.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith that the devs & busoni and I think they'll come up with something that minimize the impact of the users. Wait & see.
Yeah true. Allowing 80 BTCs to be withdrawn without check is not a good risk management.
February 20, 2014, 07:05:58 PM
The problem is not with XCP anymore. Transactions were reversed and balances have been re-established.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith in the devs & busoni and I think they'll come up with something that minimize the impact for the users. Wait & see.
I don't wanna shoot the ambulance, but Poloniex has allowed a withrawal of 80 BTC to the (dark) grey hat without manual check. This point could be discussed, but it wasn't obviously a good idea when you allow the trade of multiple 2.0 coins in alpha or the other shitcoins he lists.
Meanwhile I have faith in the devs & busoni and I think they'll come up with something that minimize the impact for the users. Wait & see.
February 20, 2014, 06:51:56 PM
Agree with proqupine. No change to protocol.
Hey all, let us wait for Busoni. He hasn't come back to us
Hey all, let us wait for Busoni. He hasn't come back to us
February 20, 2014, 06:51:22 PM
Hi prophetx, just like you I am extremely skeptical of central bankers, inflation, and bailouts. And for the record I also believe strongly in the concept of "sanctity of protocol", i.e., the idea that the protocol should be sacred and for all intents and purposes untouchable or off limits to devs and community.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
Awesome write-up - I agree this could be the best solution.
without being in any way disrespectful, but I think changing the supply of coins (after burning) is one of the worst ideas. I studied mostly macroeconomic theory and all the stuff done by central banks was initially started by a good purpose. but if you start with changing supply, you will always find reason to do so (yesterdays bug found will probably not be the last bug), so better do not start.
let us wait if busoni finds and the developers find a solution. and if that is not possible we can discuss further steps.
as a hint if we'll have some kind of voting, the last thing I vote for will be a change in supply. If we in any way want to compensate for the loss we can do it by bounty. I could also imagine a taxation of all existing accounts, but please no direct change in supply of xcp
February 20, 2014, 06:47:21 PM
If you change the original distribution / PoB once citing this problem or that problem, this sets a precedent that it could be done again. That means you now have a currency/protocol that is decidedly untrustworthy - since it might change in the future as well. I don't think you will see a lot of users that want to hedge their BTC or other assets for stability, when the very terms on which the protocol is based are potentially subject to change, same goes for companies issuing stocks etc.
This is all just some absurd naivety of people that do not understand the implications of 'decentralized' or 'trustless' systems, while being proponents of - because it sounds cool or something of the sort. This continues until it occurs to them (i.e. as by consequence of an event such as this one) that there are drawbacks and aspects of 'decentralized' protocols that do not always work as they would like etc; and are now bothered by the fact that they don't have Paypal Customer Support or Ebay Buyer Protection.
This is all just some absurd naivety of people that do not understand the implications of 'decentralized' or 'trustless' systems, while being proponents of - because it sounds cool or something of the sort. This continues until it occurs to them (i.e. as by consequence of an event such as this one) that there are drawbacks and aspects of 'decentralized' protocols that do not always work as they would like etc; and are now bothered by the fact that they don't have Paypal Customer Support or Ebay Buyer Protection.
February 20, 2014, 06:41:06 PM
XCP off coinmarketcap.com. So sad
February 20, 2014, 06:36:15 PM
... I wonder if it is technically realistic? How would this solution actually be implemented?
Hard code into the next version, recognizing an address that PhantomPhreak controls as having a balance of 35,000 XCP on the first block. Then, PhantomPhreak sends this to busoni. I would think it could be a 1 liner, not too hard?
I would hope that, if this is done, we can also set a date for when this type of fix is permanently "off limits". Maybe 6-12 months from now. In other words, a date where we all agree it is no longer Alpha software, but Beta.
And secondly, raise a pool of funds (controlled by PhantomPhreak?) to have a security audit done by an outside party, before we declare the transition from Alpha to Beta. I would donate to this and I think many others would too.
That's completely defeating the purpose of PoB.
No it doesn't. Burning again doesn't defeat the purpose of burning, it just reestablishes value.
Im not sure what the "purpose" of PoB is for you but for me it solves the problem of the initial distribution problem in an altruistic way, unfortunately only among the comparatively small group of burners. Therefore creating some extra credibility for the project's creators for not taking everybodies money upfront. This purpose I see not impeded if we increase the total money supply evenly distributed among holders of XCP.
The problems with PoB on the other hand are the small size of initial holders aka burners vs. PoW or give aways.
Also, maybe most worrysome are the "burnt" BTCs to begin with because in opposition to the IPO model, like NXT, MasterCoin or Ethereum those resources are ultimately lost and leave the community without benefitting the project development. With MasterCoin et al at least the devs can set up bounties, work full time and hire additional gear and personal to move the project forward.
To ease out some of the problems associated with PoB, while retaining its values I make the proposition to have the vote on whether or not to increase everybodies holdings by a little margin, thus distributing XCP also to new holders of the currency, fixing the exchanges (Poloniex) and its users losses,
and
setting up a budget for the devs and furtherproject development!
February 20, 2014, 06:31:44 PM
I see your point on transparency and voting mechanisms. In general I think that is a great idea. Implementation might be a challenge.
However I would point out that in this particular case it is the fault of the exchange operator not having adequate controls when on-ramping a new protocol; specifically I am referring to allowing withdrawals without manual intervention by operator staff.
But be that as it may...
Would any entity have the same chance to ask the XCP community to insure them? Basically insure the counterparty risk because he is unable to meet his obligations? Even 50 years from now?
That is the way to be fair about this over time, not some arbitrary fork in the road with a one liner that can easily be commented out. i actually laughed when i read that one...
However I would point out that in this particular case it is the fault of the exchange operator not having adequate controls when on-ramping a new protocol; specifically I am referring to allowing withdrawals without manual intervention by operator staff.
But be that as it may...
Would any entity have the same chance to ask the XCP community to insure them? Basically insure the counterparty risk because he is unable to meet his obligations? Even 50 years from now?
That is the way to be fair about this over time, not some arbitrary fork in the road with a one liner that can easily be commented out. i actually laughed when i read that one...
I agree with prophetx
February 20, 2014, 06:30:15 PM
Hi prophetx, just like you I am extremely skeptical of central bankers, inflation, and bailouts. And for the record I also believe strongly in the concept of "sanctity of protocol", i.e., the idea that the protocol should be sacred and for all intents and purposes untouchable or off limits to devs and community.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
Awesome write-up - I agree this could be the best solution.
February 20, 2014, 06:17:07 PM
... I wonder if it is technically realistic? How would this solution actually be implemented?
Hard code into the next version, recognizing an address that PhantomPhreak controls as having a balance of 35,000 XCP on the first block. Then, PhantomPhreak sends this to busoni. I would think it could be a 1 liner, not too hard?
I would hope that, if this is done, we can also set a date for when this type of fix is permanently "off limits". Maybe 6-12 months from now. In other words, a date where we all agree it is no longer Alpha software, but Beta.
And secondly, raise a pool of funds (controlled by PhantomPhreak?) to have a security audit done by an outside party, before we declare the transition from Alpha to Beta. I would donate to this and I think many others would too.
this is the most retarded thing i have read today, another bailout ... call Obama and Bernanke
Hi prophetx, just like you I am extremely skeptical of central bankers, inflation, and bailouts. And for the record I also believe strongly in the concept of "sanctity of protocol", i.e., the idea that the protocol should be sacred and for all intents and purposes untouchable or off limits to devs and community.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
I see your point on transparency and voting mechanisms. In general I think that is a great idea. Implementation might be a challenge.
However I would point out that in this particular case it is the fault of the exchange operator not having adequate controls when on-ramping a new protocol; specifically I am referring to allowing withdrawals without manual intervention by operator staff.
But be that as it may...
Would any entity have the same chance to ask the XCP community to insure them? Basically insure the counterparty risk because he is unable to meet his obligations? Even 50 years from now?
That is the way to be fair about this over time, not some arbitrary fork in the road with a one liner that can easily be commented out. i actually laughed when i read that one...
February 20, 2014, 05:30:20 PM
did anyone try to install the new 0.6 client? all that happens when I open it (after installing https://github.com/xnova/counterpartyd_binaries) is a comand line window opening and closing again after a few seconds...?
The same happened to me. Just build it from source.
i have no clue how to do that
also, are other clients like https://github.com/JahPowerBit/BoottleXCP not recommended anymore since the new 0.6 version with the fix came out?
Follow the instructions here http://counterpartyd-build.readthedocs.org/en/latest/BuildingFromSource.html#on-windows
February 20, 2014, 05:23:05 PM
did anyone try to install the new 0.6 client? all that happens when I open it (after installing https://github.com/xnova/counterpartyd_binaries) is a comand line window opening and closing again after a few seconds...?
The same happened to me. Just build it from source.
i have no clue how to do that
also, are other clients like https://github.com/JahPowerBit/BoottleXCP not recommended anymore since the new 0.6 version with the fix came out?
February 20, 2014, 05:10:22 PM
did anyone try to install the new 0.6 client? all that happens when I open it (after installing https://github.com/xnova/counterpartyd_binaries) is a comand line window opening and closing again after a few seconds...?
The same happened to me. Just build it from source.
February 20, 2014, 05:09:26 PM
did anyone try to install the new 0.6 client? all that happens when I open it (after installing https://github.com/xnova/counterpartyd_binaries) is a comand line window opening and closing again after a few seconds...?
February 20, 2014, 04:30:43 PM
So you cant really be sure of your position until the standard 6 confirmations.
Also a miner can game the system by front-running trades after solving a block.
Also there are many "latency arbitrage" "alpha" strategies that can be used to game the system, since it is possible to to make a trade in the past based on "future" information.
This is why Decentralized Distributed Exchanges for liquid assets is nearly impossible to implement.
I've read this whole thread and everything about XCP and still have not found details technical info on how the matching works, does it use "atomic transactions" ?
I have some ideas on solutions, PM if interested.. im a 15 year high frequency trading C++ coders. cheers
Hello, not sure if I can help but I've made some trades on the DEX.
Actually I've encountered a simultaneous trade with someone else (within the same block) he was first and since he took the whole order I end up with an unfilled buy order. I think that your are sure of your position as soon as the block is mined (and as long as there is no fork in BTC, which is quite rare)
About the latency arbitrages you're talking about, I have no clue but I'm really interested about this possibility and how to avoid it.
I've also red that DEXes are not (and will probably never be) suited for HFT (I remember Vitalik saying that somewhere in this thread) I have no trading vocabulary but I see the DEX as a low frequency (10m) trading engine. Which is already quite a nice innovation !
Trust me if
So you cant really be sure of your position until the standard 6 confirmations.
Also a miner can game the system by front-running trades after solving a block.
Also there are many "latency arbitrage" "alpha" strategies that can be used to game the system, since it is possible to to make a trade in the past based on "future" information.
This is why Decentralized Distributed Exchanges for liquid assets is nearly impossible to implement.
I've read this whole thread and everything about XCP and still have not found details technical info on how the matching works, does it use "atomic transactions" ?
I have some ideas on solutions, PM if interested.. im a 15 year high frequency trading C++ coders. cheers
Hello, not sure if I can help but I've made some trades on the DEX.
Actually I've encountered a simultaneous trade with someone else (within the same block) he was first and since he took the whole order I end up with an unfilled buy order. I think that your are sure of your position as soon as the block is mined (and as long as there is no fork in BTC, which is quite rare)
About the latency arbitrages you're talking about, I have no clue but I'm really interested about this possibility and how to avoid it.
I've also red that DEXes are not (and will probably never be) suited for HFT (I remember Vitalik saying that somewhere in this thread) I have no trading vocabulary but I see the DEX as a low frequency (10m) trading engine. Which is already quite a nice innovation !
This is an interesting concept but I don't expect widespread adoption of XCP.
First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.
Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.
I hope I'm proven wrong though!
First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.
Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.
I hope I'm proven wrong though!
Blockchain-based technologies in general, whether BTC, MSC, XCP or Ethereum, will not be used for HFT. The scalability is simply not there for that. OpenTransactions servers, on the other hand, are excellent for HFT. Blockchains are for higher-value transactions and settlement.
Forget about HFT. Its all about latency arbitrage. If I have the fastest quotes feeds and the fastest access to exchanges, then there are specific techniques that enable trading with nearly 100% profitability. Goldman Sacks and JPMorgan, are on a streak of hundreds of days in a row with no losses in their "prop program trading book".
In this case, its much worse, because you can decide to take the trade or give it to the original trader, depending on what happened after the trade. So you can rewrite history, it doesn't matter how frequent the trades are.
Also, if this DEX get big and there is a huge trade during a bitcoin "flash crash", I can guarantee that some group of miners/traders will front run and create a fork.
DEX can only work if you only allow trading on confirmed blocks. So basically orders can only be matched against orders that have 6 confirmations, and then you need to wait another 6 confirmations to "clear" the trade.
One idea (off the top of my head) is to have a 6 confirmation pause between "trading sessions", no trading allowed during the pause.
I think you have good points.
Taking latency arbitrage by itself: The granularity of transactions on Counterparty means that the opportunity to arbitrage is limited to gaming the Counterparty order book once every 10 minutes appropriately. That's interesting but whilst you can get your order in faster than anyone else on the DEX, everyone else in the world will be piling in orders too during that time.
The order in which orders are formed in the block is dependent on the miner. Therefore, for the low latency arbitrager it isn't deterministic so not as interesting.
However, what you then go on to describe is latency arbitrage on top of a 51% attack. This is entirely possible. Indeed there are already instances where ghash.io has been accused of gaming satoshis dice.
In fact, a miner with 51% power could deny others from accessing the DEX completely by not including Counterparty orders or cherry pick orders that it likes.
Depending on the attacker's hash rate, waiting for 6 confirmations may be insufficient. Please see section 11 calculations https://bitcoin.org/bitcoin.pdf
I'd love to hear what ideas you have to limit the ability of a large miner to game the Counterparty order book. Keep in mind though we aren't going to be able to solve a problem that is inherent in Bitcoin. That needs to be solved by the Bitcoin community. Unless of course, the utility value of Counterparty starts to outweigh the utility value of Bitcoin...
February 20, 2014, 03:09:56 PM
... I wonder if it is technically realistic? How would this solution actually be implemented?
Hard code into the next version, recognizing an address that PhantomPhreak controls as having a balance of 35,000 XCP on the first block. Then, PhantomPhreak sends this to busoni. I would think it could be a 1 liner, not too hard?
I would hope that, if this is done, we can also set a date for when this type of fix is permanently "off limits". Maybe 6-12 months from now. In other words, a date where we all agree it is no longer Alpha software, but Beta.
And secondly, raise a pool of funds (controlled by PhantomPhreak?) to have a security audit done by an outside party, before we declare the transition from Alpha to Beta. I would donate to this and I think many others would too.
this is the most retarded thing i have read today, another bailout ... call Obama and Bernanke
Hi prophetx, just like you I am extremely skeptical of central bankers, inflation, and bailouts. And for the record I also believe strongly in the concept of "sanctity of protocol", i.e., the idea that the protocol should be sacred and for all intents and purposes untouchable or off limits to devs and community.
Nevertheless, there is an important distinction here.
The world's central banks operate in a totally non-transparent fashion and they make decisions to inflate our currency without our knowledge or consent. Over the past 50 years since we left the gold standard (which had previously been in existence for more than 1000 years) this pattern of central bank corruption has become pervasive and systemic, with centralized governments accruing massive fiscal deficits, then running the printing presses to fund the bailout, at the same time constantly "cooking" the methodologies for calculating inflation to fix the optics. I have traveled to more than 100 countries over the past decade and I would say that more than, say, 25% of the 206 countries in the world are in total economic shambles as a consequence of this (and other associated and interrelated) macro-economic mismanagement. It is absolutely disgusting, it is immoral, and it leads to massive poverty, inequality, violence, etc.
I personally believe that it is a basic human right that we should have a "non-corruptible currency" for use in our everyday lives, kind of like our right to water and oxygen. =)
Notwithstanding, at this stage in the Counterparty project, where the project is still in alpha and we have encountered a technical glitch that has damaged many members of this community, and the community still being relatively small, I can also justify in my mind the situation of holding a community vote. If we were to hold a community vote and if there was a majority or supermajority consensus that every XCP holder should give-up a tiny fraction of ownership in order to cover the costs of this unintended technical glitch, then, I think this would be possibly the fairest outcome, and it would add credibility to the community. This would not be an non-transparent and centrally imposed inflation like we are faced with every day by the evil central bankers. It would be community driven! See the difference?
In summary, while I deeply and fundamentally agree with everyone arguing for "sanctity of protocol", and while I believe it is a very fine line and potentially a dangerous and slippery slope to introduce any inflation at all, I also see the possibility for an educated and intelligent community rallying together under the exceptional circumstances of a "force majeur" event such as the security breech that has just occurred to hold a vote and make a collective decision to self-tax ourselves in the spirit of helping Busoni cover the loss.
Finally, my apologies for the long and passionate message, and I will refrain from any further posts on this topic until after we hear the result of Busoni and xnova's earnest efforts to reach a resolution with the greyhat.
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