Topic: MPEx securities discussion thread - page 2. (Read 12058 times)

PGP/GPG has a WoT where you can sign someone's key with yours, indicating trust.

eg. mine is here: http://pgp.mit.edu/pks/lookup?op=vindex&search=0x7455C5E3C0CDCEB9

Peter Todd's is a more extreme example: http://pgp.mit.edu/pks/lookup?op=vindex&search=0x7FAB114267E4FA04

So that destroys many of the regular Sybil attack vectors. The bigger issue is that initialisation, where you and the person you're dealing with need to securely exchange keys. So a simple method may be to email your key fingerprint or your entire ASCII-armored public key, and then phone/Skype/IRC/whatever to confirm the fingerprint of the received key. A lot of key exchanges nowadays are done in real life, which then serves as a protection for all future communication between those two parties.


The NYSE only recently (2006) switched to annual licenses, a different model from the "trading seat" model they had previously. Because seats were forever (as with MPEX), there was a vigorous and small market where seats could be bought from brokerages that were getting out. In 2005, seats sold for $1 million - $5 million. The NYSE press release that details the shift to annual licenses is a good read if you want to learn about the history of it. I couldn't find an inflation adjustment calculator that could go back to the 1860s (when seats sold for $4 000), but in the early 1900s they were selling for $80 000, which is $2 million when adjusted for inflation. This makes the NYSE's seat cost at any point in its history 55x - 277x more expensive than MPEX.

Even now that the NYSE has switched to an annual license model, their fee is $40 000 per year (as confirmed on their trading license application form). This is still more than double MPEX's lifetime seat cost, and every year you'd have to renew it, widening that gap and making the NYSE's trading license more and more relatively expensive. I also think that this makes rational sense as it is, as MPEX doesn't have the historicity and caliber that the NYSE does, nor does it have listings that are anywhere close to the size of those listed on the NYSE. But this is perfectly fine - by the time Bitcoin is worth ~$33 300, MPEX's seat fee will be around $1 million, and we should expect that the listings will be somewhere around the caliber and size of listings the NYSE had in the early 1900s. In other words, the seat fee right now is commensurate with the size of the exchange, and that's perfectly fine.


It's hard to say - MPEX only appeals to startups involved in the Bitcoin space. Traditional startups have traditional VC funding routes, and larger companies have larger domestic exchanges they can use. A more likely scenario than a "legitimate" company listing on MPEX is that something like Van Ads or MiniGames is a rousing success, and that is a catalyst for other "legitimate" companies.


Well as demonstrated above that is provably incorrect, they have an incredibly low seat fee, one that is commensurate with their small size and volume.

That's what I thought it did. Is there currently a problem with people forging/using fake identities that I'm not aware of?


Where is the hyperbole? An mpex trading license is literally 30 million times more expensive than the NYSE.


You mean like google+? 3 years old and already half a billion users.

How long do you think it will take before a legitimate company lists on mpex? (Not talking about one man operations or MP co-owned companies)


How do you explain the fact that mpex is asking half of what the NYSE is asking for a trading license yet is several million times smaller in both market cap and trading volume?

Why can't mpex pretend to be like the NYSE without a referral scheme and with less exorbitant trading license fees?

You miss the point of PGP / GPG. First: it probably won't be useful in the future, cryptography moves and advances. Nonetheless, GPG as it is used today is NOT use primarily as a means of encryption. There are plenty of tools that are more performant, more efficient, and arguably more cryptographically secure. GPG's primary purpose is a means of confirming one's identity.

A similar role is served by sites employing DNSSEC to confirm the validity of an A record: it is a means of confirming that that (barring some sort of exceptionally advanced or esoteric attack) you are indeed talking to the server for whatever.domain.you.specified.com. It's a way of confirming the identity for that FQDN.

Traditional stock exchanges, such as the NYSE, have evolved from ancient analog systems, so a lot of this infrastructure (whereby the authenticity of orders is confirmed) is based on the equipment of those brokerages / seat holders being close to the NYSE's tin. An exchange such as MPEX is not evolving from pen-and-paper, so it has instead chosen to take advantage of the system that is one of the most secure and renowned for identity verification over the Internet. It's not perfect, it has nuances and failings of its own, but it's just as cryptographically sound as the NYSE's "please put your box next to ours and run a fibre cable into the jack at the back" solution.

PS. You seem to be a fan of hyperbole, especially with your NYSE comparison. Ironically you fail to take the effect of time into your puerile vitriol. By comparison: if a competitor to Facebook sprung up 2 years ago, would it have 1.32 billion active monthly users by now? Historicity leads to a network effect which creates the companies and organisations we know today. Comparing an organisation with nearly 2 centuries of history with one that has been around for only a few is silly and beyond idiotic, especially since the global paradigms they are operating within are so vastly different. I used to think you were more intelligent than you have proven yourself to be, Jimbo.

You're right pgp could be useful in the future but as of now everyone seems to be doing fine without it.