The network and trading can be completely decentralized but the handling of fiat never can be.
Imagine if a trusted third party issued a coin called USDCoin (likely you wouldn't want to use that name). One USDCoin could be redeemed for $1 USD by the issuer.
Once enough USDCoins were purchased you would have fully digital manifestation of fiat money (technically money substitute). If you wanted to sell coins you could then use the decentralized exchange to trade Bitcoins for USDCoins. When you had enough USDCoins you would "cashout" via the originator website (ACH, check, wire transfer, western union, etc) and the USDCoins would be destroyed.
Now in that example there is a single fiat coin but technically the decentralized exchange could handle multiple fiat currency tokens issued by multiple exchanges (which would simply convert USD to USD token and USD tokens back into USD). The same mechanism could be used to trade silver/gold/other metals, even things like SPDR shares, debt/bonds, etc.
Obviously the USD "token" would only be as good as the exchange (maybe moneychanger is better term) that issued it.
Topic: Decentralized BTC Exchange Client. impossible to implament? - page 2. (Read 3273 times)
With a decentralized exchange cryoto-currency, any exchange or client can report data on bitcoin value which will be statistically analyzed.
Lets say Sally trades with Tom her fiat cash for bitcoin. Tom then sends bitcoin to Sally and inputs a "value" field of x AUD. This data is sent to an alternate cryptocurrency well call for the moment pricecoin.
Later when Tom wants to sell Bitcoin he can get the current price of Bitcoin or any other commodity or stock that is traded and reported this way for Bitcoin.
The Pricecoind.exe client collects all the data it can from nearby nodes and statistically analyzes the price to find the median price and compares it to the variance of previous blocks to find the new mean price. Each client will be doing this statistically and reporting prices which will cancel extreme highs and lows (unless there is statistical significance to include them). Prices will still fluctuate based on consistent trends rather than a few individual HSTs. This would stabilize Bitcoin immensely.
Lets say Sally trades with Tom her fiat cash for bitcoin. Tom then sends bitcoin to Sally and inputs a "value" field of x AUD. This data is sent to an alternate cryptocurrency well call for the moment pricecoin.
Later when Tom wants to sell Bitcoin he can get the current price of Bitcoin or any other commodity or stock that is traded and reported this way for Bitcoin.
The Pricecoind.exe client collects all the data it can from nearby nodes and statistically analyzes the price to find the median price and compares it to the variance of previous blocks to find the new mean price. Each client will be doing this statistically and reporting prices which will cancel extreme highs and lows (unless there is statistical significance to include them). Prices will still fluctuate based on consistent trends rather than a few individual HSTs. This would stabilize Bitcoin immensely.
Somebody through up a wiki on freenet for buy & sell offers until something automatching is made.
It's not like we need a full exchange that reports the volume of transactions. All we need is a general idea of the price bitcoin is being traded at.
This would be organic and require trust of not a central reporting authority, but of all bitcoin users to volunteer honest reporting.
- An Exchange Coin is created. The coins generated from it include pricing of all included crypto-currencies. More can be added if everyone agrees.
- Each coin client (including bitcoin) allows a price value in various fiat currencies to be reported to Exchange Coin.
- The Exchange Coin factors in the reported prices and runs a statistics algorithm that finds the current mean values.
- HST and bot trades could be filtered out statistically.
This would be organic and require trust of not a central reporting authority, but of all bitcoin users to volunteer honest reporting.
Instead of an exchange, can we just have a decentralized ticker that reports any supported crypto-currency? It would only report the trades that have the value volunteered. The reason for this is that exchanging fiat currency for bitcoin requires trust anyway. It's not that I don't trust MtGox to report the trades accurately, but if we have to trust them, why not trust everybody and then use statistics to account for variance in each vector of bitcoin use. We can use the same ticker for accounting for any alternate blockchain. This would also of course be an alternate blockchain and the current prices would be included in every new block. We could even charge a transaction fee for price quotes.
huh?
i don't understand.
Instead of an exchange, can we just have a decentralized ticker that reports any supported crypto-currency? It would only report the trades that have the value volunteered. The reason for this is that exchanging fiat currency for bitcoin requires trust anyway. It's not that I don't trust MtGox to report the trades accurately, but if we have to trust them, why not trust everybody and then use statistics to account for variance in each vector of bitcoin use. We can use the same ticker for accounting for any alternate blockchain. This would also of course be an alternate blockchain and the current prices would be included in every new block. We could even charge a transaction fee for price quotes.
ya thats what i thought, you have to find an offer yourself and once you do find an offer you want to take, you have to manually send the money to the individual....
send money to an anonymous individual, at your own risk
send money to an anonymous individual, at your own risk
There is already a working (mostly) decentralized exchange: https://bitcointalksearch.org/topic/dark-exchange-a-100-decentralized-p2p-exchange-27055
It does not use the method described above. I'm not sure how you would implement it. Instead, it works like OTC where you can post your order to the network and others can find it, or you can search for orders already posted.
There is a working implementation, but hardly anyone is using it, and it's having issues with a few exceptions here and there. However, I've used it to exchange coins and so have a few others.
It does not use the method described above. I'm not sure how you would implement it. Instead, it works like OTC where you can post your order to the network and others can find it, or you can search for orders already posted.
There is a working implementation, but hardly anyone is using it, and it's having issues with a few exceptions here and there. However, I've used it to exchange coins and so have a few others.
I just posted on another topic about the same subject: https://bitcointalksearch.org/topic/m.587437
Decentralized BTC Exchange Client. Can we do it?
Here is how it would work:
Decentralized BTC Exchange Client.
1) download the Decentralized BTC Exchange Client, Magically send money or BTCs to it
2) Place a bid or ask in whatever currency you have available on your client
3) the Client would continuously scan the other clients, asking each one, "Can you fill my order?"
in theory you could place a order of, 1$ CND for 1$ USD, just as easily as 5$ for 1 BTC
the big problem is how to "load your client with money"... the current exchanges handle the wiring of money to 1 central place (ex. MTGox)
handling the wiring of money directly to individual clients (In and Out), would be the key, and may prove impractical / illegal (i don't think you can be your on bank).
this would be much easier to implement if it was dealing with only cryptocurrency , ex. 1 BTC for 10000 SOLID COINS
is it just me or is a Decentralized BTC Exchange Client impossible??
I'm wondering how this is going https://bitcointalksearch.org/topic/m.105791
I also asked about this in another thread.
Is there a more organic way to set the price of bitcoin? What would happen if we just put a bitcoin price tool in the general client? If we voluntarily report a fiat value of bitcoin for purchases or trades to another decentralized network, that network can analyze the data and report a statistically reliable price. The network can verify via a second hash generated with the same key as the bitcoin, but will also have pricing data in various currencies. Bots will mess with the pricing, but not enough that can't be dealt with by the algorithm or as are any other network attacks. Any thoughts?
Decentralized BTC Exchange Client. Can we do it?
Here is how it would work:
Decentralized BTC Exchange Client.
1) download the Decentralized BTC Exchange Client, Magically send money or BTCs to it
2) Place a bid or ask in whatever currency you have available on your client
3) the Client would continuously scan the other clients, asking each one, "Can you fill my order?"
in theory you could place a order of, 1$ CND for 1$ USD, just as easily as 5$ for 1 BTC
the big problem is how to "load your client with money"... the current exchanges handle the wiring of money to 1 central place (ex. MTGox)
handling the wiring of money directly to individual clients (In and Out), would be the key, and may prove impractical / illegal (i don't think you can be your on bank).
this would be much easier to implement if it was dealing with only cryptocurrency , ex. 1 BTC for 10000 SOLID COINS
is it just me or is a Decentralized BTC Exchange Client impossible??
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