Topic: Convince me not to Invest $20,000 in P2P Bank/Exchange Idea - page 2. (Read 3154 times)

Sorry, Can't convince you not to. I've been so excited about this prospect for some time. If anything, i would like to be a part of it.
The only reason not to is because the timing is not right. There's still a lot of infrastructure building going on, but that's your call.

The in-chain exchange would allow you to broadcast bids that are 'cached', when a bid is accepted it is included in a transaction which is broadcast to the network.  The transaction with the highest fee will be included in the block first.   Thus high-frequency trading could occur by receiving a bid and broadcasting a high-fee transaction as soon as possible to 'lock it in'.  It would be a race and the network would prevent propagation of 'double claims' that have lower fees, and the high-frequency trader would have to wait for 1 or 2 confirmations to see if they won the bid, but they could respond very quickly to the initial publishing of the bid. 

If you need fast back/forth trading then that could still happen off-chain on a TOR hidden service with a counter-party that is trusted.  But for most people that isn't worth while.  High-frequency trading (beyond a 10 minute window) is really all about arbitrage between exchanges and if they exchange is built in it would be very hard to arbitrage / compete with.


For most people one trade every 10 minutes is good enough.  The crypto-USD could be used outside the shared exchange as easily as bitcoin-to-litecoin exchanges operate today.  Do your High Frequency trading there.

Please read my other posts where I explain how crypto-fiat has market-value of its own at or near parity based upon changes in the relative DIVIDENDS paid to crypto-USD in BitShares.  There is no need to have a company or individual provide backing just like there is no need to have that with Bitcoin.

That is exactly what I had in mind.  I know that the single biggest cost in RAM is transistor count and that RAM / cache is also the single most expensive part of GPU/CPU.   RAM is already as efficient an ASIC as the marktet can produce and because it is dual use it is EVERYWHERE.

So anyone who was creating a specialized ASIC would end up sinking the vast majority of their transistor count into RAM.  The end result being that while they may be able to do some of the calculations 1000x faster than a CPU the cost of the ASIC would be such that a 1000x speed up in calculation time only gives you a 1% gain in $ return.   So sure, they could create specialized hardware to accelerate it but the ROI would not have the same leverage as bitcoin ASIC.

interesting idea.

i'm not technical enough to implement this but i see a few issues, some of them appear in your original thread on this.

1) how do you solve the issue of broadcasting bids in an efficient and timely manner? even though some of us may not like high frequency trading with bots they do serve a purpose for price discovery and liquidity

2) how do you solve the issue confirmation of trades in a timely manner

I like this part of your idea, except I don't understand how you incorporate fiat unless you make a fiat backed crypto which 1 company controls, and destroys if a trade occurs and the accepting user transfers back into a bank account:

5. Have three-user (trustless) trading
  - how about 2-user trust-less trading between crypto-Fiat and 'BTC' and using escrow for remote exchanges of crypto-Fiat for bank-Fiat?

First of all, I think it's a very interesting idea.

I would like to zoom in on point 5 of you post in the other thread: Update the hashing algorithm in a way to prevent centralized control or instant monopoly of all shares by asic mining companies.

If your idea will be a succes, then it will become interesting for people and/or companies to develop ASIC's which are compatible with the new hashing algorithm. When the incentive is high enough, someone somewhere will put in the effort to develop such an ASIC.

This in itself might not undermine your idea, but it is something you should keep in mind.

10 BTC = $1,320 at the moment.. so I am confident enough that I am willing to risk 5-8% to a stranger to save 90% of my capital.   Besides, even if you convince me to drop my current idea, chances are the discussion would lead to an even better idea and thus allow me to deploy the other 95% of my investment more effectively.

I would make my money back the same way early investors in Bitcoin made their money.  Not by pre-mining or pumping and dumping, but by recognizing before others that BitShares are undervalued relative to all other crypto-currencies.  

Thus, by investing money to create the solution I am creating the opportunity to invest as an early adopter.   If I can convince others to help build it out based on the same recognition of the value in the idea then so much the better.  

I am not trying to pull of a pre-mining type system like Ripple but would be thrilled simply to see a solution on the market place that addresses all of the weaknesses in bitcoin (centralized exchanges).   Ultimately my system would enable a gold and silver based crypto-currency without the need for any IOU based issuance.  Not only that but the gold and silver deposits would pay INTEREST and thus absolutely destroy all criticism of crypto-currencies being backed by nothing.

How would you ever make your money back?

In this thread https://bitcointalksearch.org/topic/old-bitshare-economic-theory-10-btc-bounty-to-prove-me-wrong-paid-215488  I am discussing a plan for a distributed peer-to-peer bank / exchange that actually pays interest on all deposits (gold, silver, USD, etc) and IS NOT based upon any IOU or counter-party risks.  It allows you to withdraw funds and all of this occurs at prices cheaper than depositing / withdrawing funds from Mt. Gox or even your local ATM.  

The idea behind it is difficult to grasp at first and is easily dismissed but once understood is amazingly simple and elegant.  Because I want feedback and want to know what I am missing and what I haven't explained well enough to generate the interest and enthusiasm I feel it deserves, I am offering a 10BTC bounty to motivate people to tear my idea to shreds and save me $20,000.

So here is the deal, I am putting my money where my mouth is and making a wager that I can convince you to be as excited about my solution as I am.  If I am right then the time spent attempting to understand my idea would allow you to be an early adopter to a system that could replace bitcoin, if I am wrong and you are right then you will earn 10BTC for your time and we will have had a good debate regarding economics and technical details.

Overall I am seeking to bring out bright and intelligent debate around my idea.  I need to learn how to explain it in terms that is far easier for everyone to understand.    I am willing to Skype or talk on the phone if it would aid communication.