Topic: Decentralize Mt.Gox by franchising (Read 1158 times)

Very good point.

I personally wouldn't mind seeing some competition. There are a few small exchange websites out there, but they are not able to compete with Mt.Gox.

In my opinion it's a problem that Mt.Gox has a monopoly over the exchange market. They won't innovate, simply because they don't have to. Everyone will use their service anyway. It's necessary for the future of Bitcoin that there will be competitors in the next few years to at least keep things innovative.

What about MtGox vending machines of some sort?

This is a good idea from a marketing perspective, the next part is to convince MTGox that their software and processes sux, and the only thing that they got right was the brand!

Maybe, rather than franchising, we should be looking at licensing the brand to the decentralised exchange and broker idea.

What we would end up with is an MTGox in every town, that works, and still pays MTGox for the investment they made in bitcoin from the beginning.

That is still a win win for me - and by using the licensing idea, it puts an element of commercial control on the brokers to use best practice - as soon as someone works out what they are!

Can't really argue with that one 

People seem to like the mtGox brand and they do get a lot right. Their security scheme is pretty good. They just are too centralized.

Franchising could actually work and should be considered along with all other ideas. At least mtGox should be considering it.

+1 to this idea. This is the best idea yet!

But what stops an attacker from simply collecting all the IP addresses to all of them and attacking the whole franchise?  Anyway expand upon this idea. This is definitely part of the solution and someone needs to tell mtGox to do this.

I have to disagree on this one.  I think the free market will decide this one for us, and the last 48 hours or so have opened many people's eyes to the need of robust exchanges with systems built to handle the volume of today and able to quickly scale to handle the volumes in the future, if and when necessary.

When I think of franchising, I think of a successful corporate entity that has built a name, formula or business model, and systems or processes that support that existing name & model that they have proven works and they are willing to share that formula with other people, for an initial buy-in fee and recurring gross profit payments for using that already-establish system.  The last 48 hours have seriously brought at least the level of the Mt Gox systems into serious question.  I'm not sure replicating that is anything I would support and I'm not sure why anyone else would want to.

I think this will open the doors wide open for other exchanges to establish themselves as ready to handle future BTC interest in growth.  For the health of the community, I hope it is multiple exchanges run by multiple companies.

It might be nice with changing the name to something OTHER than the "Magic the Gathering Online eXchange".  That one is still cringe-worthy to me.

To some extent you could regard the CoinLab deal as "franchising".  The problem is that MtGox would still be providing the actual trading platform for franchises and that platform would still be overloaded.  There's also the question of liability of franchise holders lose user funds.

I don't think MtGox has the resources for this to be a viable option at the moment.  What you need is people who are more competent than MtGox and better resourced than MtGox entering the exchange market.

If the relaunched TradeHill and Jesse Powell's Kraken are successful, they'll lure a certain type of customer away from MtGox due to offering more trading options - leaving MtGox with low value, "vanilla" customers.  We really don't need a heap of exchanges which are just smaller carbon copies of MtGox.

As long as we need exchanges as an interface to the real world economy, they will remain the point of attack. Not only by hackers and regulation, but by the fact that Bitcoin is too small a market value to support all sectors of business and production.

In some possible future, farming, production and end user businesses will be able to deal completely in Bitcoin so other currencies fluctuations becomes less important. Think of Bitcoin not only as a currency but as a decentralized country, then you will have a sense of what is needed for it to be strong enough to resist hostile attempts of any kind

It's like the border exchanges where you are forced to buy the national currency before you enter the country they are a week point if you are a small country and want to trade with your neighbours as they force you to buy their currency!
When you have a large economy, the home market can supply everything and other come to you.

So  businesses that sell stuff for Bitcoin but in reality is doing an exchange into USD or EUR when they buy from ordinary vendors and don't keep their own stock, are exchanges for Bitcoins also and not a true business dealing in Bitcoins only and a point of attack. This is in no way criticism on the effort these businesses are doing now and their function and importance at this stage is invaluable, but they are not the solution long term if Bitcoin is going to be more than a "shadow" Dollar and Euro.
Do we one day have a power plant only payable in Bitcoin?

Think of holding a Bitcoin as a proof of citizenship in the first democratic decentralized country ever that is larger than an atol in the pacific.

So even Bitcoin needs a backing nation as well, or to phrase it the right way around: let the currency build the country.

I agree that it would be the best solution. But bitcoin price crashed in 2011 and 2013 much because of Mt.Gox and they STILL are the biggest exchange. I don't know what else people need to start using other exchanges. I mean, i don't want the bitcoin economy to take another hit in the future because Mt.Gox has become a dinosaur, failing because it is reluctant to change and bringing a large part of the bitcoin economy with itself in the fall.

yeah sure, but I rather see independent competing ones.. or a open source exchange that runs on clustering like the Electrum software does

We should force MTGOX to sell to walmart, problem solved.

Great idea and it could also be applied to other Exchanges not just Mt.Gox.

This is a brilliant idea.  The devil is in the details.  I have run exchanges and it is the details that kill you (as Mt. Gox knows).  But still, the crytpo currency community needs and exchange that can function reliably and in an open and distributed manner.

About a month ago i predicted that Mt.Gox would be a threat to the whole bitcoin community. They being the reason for the crash is debatable but they certainly didn't help. My problem is not that my BTC now are worth less but that it had to happen while the whole world was watching. Mt.Gox really showed people that the bitcoin economy is unstable and primitive. I think it's very strange that so many people that want to get out of the central bank's control help make a very similar system when having free hands. Does the expression "to big to fail" ring any bells?

Now with so many new members jumping in and Mt.Gox not being able to upgrade itself i knew that it was unsustainable and that the lag will get worse for everyday. Now the only thing i could think of for Mt.Gox to function properly was either:
1. People leave for other exchanges.
2. Mt.Gox stops accepting new members for a while.
When thinking about it both these options are impossible. The problem with the first one is that people are used to Mt.Gox and only a handful are leaving. And even if all the people from these forums left Mt.Gox, almost all the newbies still flock to Mt.Gox. The name Mt.Gox is to large.
The second option would be the most responsible by Mt.Gox. But why would they do it? The world is driven by profit and and why would they give their market share to competition?

Now my idea is why not decentralize Mt.Gox by franchising?
I'm thinking something like Mt.Gox let's people apply for being an Mt.Gox exchange. Mt.Gox verifies them, writes a contract and helps with consulting. They can close for new members on Mt.Gox and only accept minimum deposits of 10,000$. The rest they send to the franchisers. For that Mt.Gox gets a percentage of the earnings. This means that they get to keep their huge market share while not being a central point of risk to the bitcoin economy. It's a win-win for everybody. It could even boost bitcoin economy since more people would open exchanges and make money. This way even if one Mt.Gox exchange gets DDosed people can go trade on another. It doesn't have to be implemented exactly this way but i can only see positive effects if Mt.Gox chooses to go in this direction.

What do you think? Feel free to discuss.