Topic: I release this project idea into the public domain. Run with it! (Read 1424 times)
(Half-ass, non-hacker level) proof of concept up at http://nobid.tbz1.com - let the abuse begin!
It appears you didn't actually read the OP, let alone key words.
Sorry but that would not work. With a small understanding of how markets work can actually detect the error in this logic.
If the BID=ASK then that exchange will get flooded with trash orders. Nothing stops people from just buying and selling it back.
Now if you put a 2% comission on every trade to stop flooding then you end up with another problem.
Market making... You cannot have a controlled market without liquidity provider.
For a sell you need an equivalent buy, if you say the price will be "autofilled" then you need a LP to contain the risks, but they cant move the price without losing alot of money, if too many orders are open.
Say we got 5 million $ orders open to buy at 210$/BTC, if we move the price down to 209$, who will cover the losses? If the traders can bid the price down and take the risk individually, then either the exchange or the LP takes the risk.
They will go bankrupt in 1 week, sorry, there is a reason why spread exists
If the BID=ASK then that exchange will get flooded with trash orders. Nothing stops people from just buying and selling it back.
Now if you put a 2% comission on every trade to stop flooding then you end up with another problem.
Market making... You cannot have a controlled market without liquidity provider.
For a sell you need an equivalent buy, if you say the price will be "autofilled" then you need a LP to contain the risks, but they cant move the price without losing alot of money, if too many orders are open.
Say we got 5 million $ orders open to buy at 210$/BTC, if we move the price down to 209$, who will cover the losses? If the traders can bid the price down and take the risk individually, then either the exchange or the LP takes the risk.
They will go bankrupt in 1 week, sorry, there is a reason why spread exists
Perhaps relevant to this topic, nastyfans.org uses a "no-bid" exchange for trading NastyFans seats. Although the reasoning behind this is so that the exchange doesn't need to hold the user's BTC for bids and the user doesn't ever need to deposit funds on the exchange. The buyer simply buys one of the sell orders and BTC is directed to the seller. This makes the exchange a very undesirable target for hackers and reduces the trust and liability factor of sending your BTC to a 3rd party. I imagine a traditional banking routing system could be setup so that instead of depositing funds onto the exchange, your funds get routed to the seller's banking account from the buyer's upon confirmation on the blockchain that some sort of escrow account has been funded. After the mtgox debacle, I could see why such an exchange might be popular among Bitcoin users.
With everyone aware of the arbitrage cycle, nobody logical would see the point in selling lower than the highest price possible, which would always be at No-Bid, until No-Bid #2 was cloned at a higher starting price than the last completed limit sell on No-Bid #1.
Cheaper BTC on other exchanges would be bought up to limit sell at the highest No-Bid, leaving other order books' bid sides in the dust with nobody logical dumping into them. Proper trading bot logic would not allow BTC to be sold for less than No-Bid's last, and sync with No-Bid's API to move the price up on other exchanges, if they had some vested interest in not transferring their BTC to sell on No-Bid.
One would think payment processors like BitPay and Coinbase would use No-Bid so that they can consistently profit the difference between what their customer is owed and what their customer's customer's BTC sold for.
Cheaper BTC on other exchanges would be bought up to limit sell at the highest No-Bid, leaving other order books' bid sides in the dust with nobody logical dumping into them. Proper trading bot logic would not allow BTC to be sold for less than No-Bid's last, and sync with No-Bid's API to move the price up on other exchanges, if they had some vested interest in not transferring their BTC to sell on No-Bid.
One would think payment processors like BitPay and Coinbase would use No-Bid so that they can consistently profit the difference between what their customer is owed and what their customer's customer's BTC sold for.
People are greedy and selfish,
and they will rather buy coins from another exchange - so that they get it cheaper and then maybe come and sell them on No Bid.
The questions is again, who would buy coins from No Bid when they can get them cheaper elsewhere?
and they will rather buy coins from another exchange - so that they get it cheaper and then maybe come and sell them on No Bid.
The questions is again, who would buy coins from No Bid when they can get them cheaper elsewhere?
A BTC/fiat exchange that has no bid side of the orderbook. Working title: "No-Bid"
Due to arbitrage, would a single, competently coded (multi-sig, no attack surfaces) No-Bid of this design destroy the incentive for dumping on all other exchanges?
To limit arbitrage barriers, would No-Bid require a withdrawal process that allows streamlined direct fiat transfer to other exchanges' common deposit methods (assuming all of them accept international wire transfers, for example), and not just the sellers' personal bank accounts (which would require a double fee hit getting withdrawals to them and back out to another exchange)?
Would any exchanges stand in the way of inter-exchange withdrawal/deposits from No-Bid? And if every single one of them did, would nobody want to sell at No-Bid?
- Sellers enter limit sells (asks) above the latest completed limit sell price only. Any attempt to enter a lower price will auto-correct the price to the latest completed limit sell price+1 cent. No-Bid will open for business with a limit sell of its own 1 BTC at BitcoinAverage's last, so nobody else can complete a ridiculously lower trade. The price will go up with every sell wall (ex. 1000 BTC at 1 cent above the exchange-opening order at BitcoinAverage last) crested.
- Buyers enter the quantity of BTC they want to buy and the most they're willing to pay per BTC. This will either fill instantly, or be rejected instantly if they enter a price below the latest completed limit sell price. GUI in terms of numeric entry and/or price slider with confirmation password dialogue, or whatever, TBD.
- Terms and Conditions in the clearest possible language (and translated) that no fiat deposit is to be made to No-Bid with the expectation that a buyer's price lower than the latest completed limit sell price at time of order entry can be filled; it will always be higher than the time of deposit initiation. And the inverse for BTC deposits; no downward slippage is possible, by design.
Due to arbitrage, would a single, competently coded (multi-sig, no attack surfaces) No-Bid of this design destroy the incentive for dumping on all other exchanges?
To limit arbitrage barriers, would No-Bid require a withdrawal process that allows streamlined direct fiat transfer to other exchanges' common deposit methods (assuming all of them accept international wire transfers, for example), and not just the sellers' personal bank accounts (which would require a double fee hit getting withdrawals to them and back out to another exchange)?
Would any exchanges stand in the way of inter-exchange withdrawal/deposits from No-Bid? And if every single one of them did, would nobody want to sell at No-Bid?
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