Not so "decentralized" currency... | Bitcointalksearch.org

Dargo

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Quote from: piramida on April 03, 2013, 01:16:42 PM

Gox has been a problem for several years and everybody knows that; I personally would love to see a true p2p/web of trust decentralized exchange like bitcoin-OTC only easy to use for the layman; but this is a hard problem and while it's not solved we can use many exchanges with varying degrees of crapiness, Gox being the biggest now.

In either case, these speculative exchanges are temporary measure and not really needed in the end, if there are Bitcoin ATMs for us to buy/sell coins for local currencies. All that needs to happen is for bitcoin to be (behind the curtains) added to the bank exchange system and become one of the world's hard currencies, to be tradeable on existing forex systems and interbank. Meanwhile, use whichever exchange suits you better and don't worry about merchants, they are covered

Yep, I agree on all points.

randrace

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LTC -> BTC -> Silver!

Bitfloor works like a charm.

piramida

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Borsche

Gox has been a problem for several years and everybody knows that; I personally would love to see a true p2p/web of trust decentralized exchange like bitcoin-OTC only easy to use for the layman; but this is a hard problem and while it's not solved we can use many exchanges with varying degrees of crapiness, Gox being the biggest now.

In either case, these speculative exchanges are temporary measure and not really needed in the end, if there are Bitcoin ATMs for us to buy/sell coins for local currencies. All that needs to happen is for bitcoin to be (behind the curtains) added to the bank exchange system and become one of the world's hard currencies, to be tradeable on existing forex systems and interbank. Meanwhile, use whichever exchange suits you better and don't worry about merchants, they are covered

Dargo

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Quote from: piramida on April 03, 2013, 11:03:31 AM

Maybe they (bitpay) even had some losses; but it's their problem to figure out at what price they can sell the coins and which exchanges to use; I'm pretty sure they don't just rely on gox

So whatever we discuss here, large businesses like bitpay will figure out a fallback options, don't worry. You make it sound as if when gox goes down bitcoin economy stops - it does not, that's all I wanted to point out

Oh, sorry, that's not what I intended to convey, but I can see how you got that impression. And I should have considered that all/most merchants are insulated from exchange rates to a large extent by using bitpay (or similar - not sure how many options there are here). I'm not worried, but I do think that Gox in its current state is a point of weakness. It has liquidity, but can't handle volume. That will hopefully be changing soon though. It's also unfortunate that a DDOS attack can be used to manipulate price (though in this case it may not have been entirely bad since we probably needed something to stem the madness, even if briefly). It would be better to have many exchanges with deep liquidity and capacity for volume though, and again I see this as something that will come with time. A stronger exchange network is IMO one of the prerequisites for BTC to grow into a major worldwide medium of commerce, and one that (based merely on my sporadic reading around the forum) doesn't get discussed enough. But this will have to come along with BTC growth, and there will be bumps along the way. But fundamentally I'm very bullish on BTC and the economy it is enabling, and there's no way a little glitch like this can shake that.

piramida

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Borsche

Maybe they (bitpay) even had some losses; but it's their problem to figure out at what price they can sell the coins and which exchanges to use; I'm pretty sure they don't just rely on gox

So whatever we discuss here, large businesses like bitpay will figure out a fallback options, don't worry. You make it sound as if when gox goes down bitcoin economy stops - it does not, that's all I wanted to point out

Dargo

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Quote from: piramida on April 03, 2013, 10:14:18 AM

Quote from: Dargo on April 03, 2013, 10:06:43 AM

OK, good. But how does bitpay sell their coins? I assume they have a variety of ways, but isn't Gox one of the major ways? I don't think bitcoin is somehow centralized because of Gox, but I do think Gox is relied on too heavily, even if it is just for trading and not any merchant activity. Sort of reminds me of deepbit back in the day when it was much larger than any other pool (even though IMO it wasn't the best pool).

Gox has the largest volume, hard to argue, but the argument was about your invalid point that "merchants who need an exchange rate to price goods and services in BTC". Just saying that merchants have a perfect way to be completely shielded against any exchange rate or ddos or other similar growth perturbations.

Fair enough. Merchants using a service like bitpay don't need an exchange rate directly, but a service like bitpay does need an exchange rate. Even if they sell coins directly to buyers, they need some way of knowing whether the price is fair in terms of the going rate. And I have trouble believing that to have the largest exchange with the best liquidity go down completely, or lag so badly one effectively can't trade, doesn't pose some difficulty for this.

piramida

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Borsche

Quote from: Dargo on April 03, 2013, 10:06:43 AM

OK, good. But how does bitpay sell their coins? I assume they have a variety of ways, but isn't Gox one of the major ways? I don't think bitcoin is somehow centralized because of Gox, but I do think Gox is relied on too heavily, even if it is just for trading and not any merchant activity. Sort of reminds me of deepbit back in the day when it was much larger than any other pool (even though IMO it wasn't the best pool).

Gox has the largest volume, hard to argue, but the argument was about your invalid point that "merchants who need an exchange rate to price goods and services in BTC". Just saying that merchants have a perfect way to be completely shielded against any exchange rate or ddos or other similar growth perturbations.

Dargo

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Quote from: piramida on April 03, 2013, 09:50:56 AM

Quote from: BitcoinTate on April 03, 2013, 09:46:08 AM

Did you get your price locked in or did you check the box that says they will use the exchange rate when your funds arrive 5 days from now? Big difference.

No, I bought at the quoted price (141.60). That difference I know

Quote from: Dargo on April 03, 2013, 09:47:10 AM

bitcoinstore usually tracks Gox pretty closely as well, though at the moment their exchange rate is quite a bit lower (137.5), but I don't know how they are getting that. I would be happy to be wrong about this, and I could very well be, since it's just casual observation on my part that the merchants I've seen seem to be tracking Gox exchange rate.

https://www.bitcoinstore.com/

They don't look to gox for anything - they use bitpay, which has their own price estimation based on what price they managed to sell their coins (which they do immediately), so the price is guaranteed to merchant - if they sell something for 100 USD it's 100 USD they get when the item sells.

OK, good. But how does bitpay sell their coins? I assume they have a variety of ways, but isn't Gox one of the major ways? I don't think bitcoin is somehow centralized because of Gox, but I do think Gox is relied on too heavily, even if it is just for trading and not any merchant activity. Sort of reminds me of deepbit back in the day when it was much larger than any other pool (even though IMO it wasn't the best pool).

piramida

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Quote from: BitcoinTate on April 03, 2013, 09:46:08 AM

Did you get your price locked in or did you check the box that says they will use the exchange rate when your funds arrive 5 days from now? Big difference.

No, I bought at the quoted price (141.60). That difference I know

Quote from: Dargo on April 03, 2013, 09:47:10 AM

bitcoinstore usually tracks Gox pretty closely as well, though at the moment their exchange rate is quite a bit lower (137.5), but I don't know how they are getting that. I would be happy to be wrong about this, and I could very well be, since it's just casual observation on my part that the merchants I've seen seem to be tracking Gox exchange rate.

https://www.bitcoinstore.com/

They don't look to gox for anything - they use bitpay, which has their own price estimation based on what price they managed to sell their coins (which they do immediately), so the price is guaranteed to merchant - if they sell something for 100 USD it's 100 USD they get when the item sells.

Dargo

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Quote from: BitcoinTate on April 03, 2013, 09:35:33 AM

Quote from: piramida on April 03, 2013, 09:33:38 AM

Quote from: Dargo on April 03, 2013, 09:30:13 AM

Don't understand your comment. Of course price depends on supply and demand, and arbitrage can even out price difference across exchanges, but this isn't relevant to my point. I'm talking about merchants who need an exchange rate to price goods and services in BTC. Every BTC merchant I've seen looks to Gox for this. If Gox is down, these merchants are flying blind (though maybe some have a back up plan for this - I don't know).

Which merchants look to gox? what for? which year is it now? There are several bitcoin payment processors; and if you wish to get fiat for your goods, you can be completely isolated from the going rate of BTC, and that's what most if not all merchants do. Now back to your misinformation - link to at least one merchant who is looking at gox for prices?

Coinbase for one.

bitcoinstore usually tracks Gox pretty closely as well, though at the moment their exchange rate is quite a bit lower (137.5), but I don't know how they are getting that. I would be happy to be wrong about this, and I could very well be, since it's just casual observation on my part that the merchants I've seen seem to be tracking Gox exchange rate.

https://www.bitcoinstore.com/

BitcoinTate

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Quote from: piramida on April 03, 2013, 09:40:52 AM

Quote from: BitcoinTate on April 03, 2013, 09:35:33 AM

Coinbase for one.

But I can buy coins at coinbase now: "Success! Your purchase completed successfully." 5 seconds ago. What gives? Whatever exchange risks there are, they are isolated from goods merchants by btc processors (and coinbase is one of those).

Did you get your price locked in or did you check the box that says they will use the exchange rate when your funds arrive 5 days from now? Big difference.

wopwop

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Quote from: piramida on April 03, 2013, 09:40:52 AM

Quote from: BitcoinTate on April 03, 2013, 09:35:33 AM

Coinbase for one.

But I can buy coins at coinbase now: "Success! Your purchase completed successfully." 5 seconds ago. What gives? Whatever exchange risks there are, they are isolated from goods merchants by btc processors (and coinbase is one of those).

if the price of bitcoin goes too high compared to theprice you locked at the time your funds go thru they'll cancel your order

piramida

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Borsche

Quote from: BitcoinTate on April 03, 2013, 09:35:33 AM

Coinbase for one.

But I can buy coins at coinbase now: "Success! Your purchase completed successfully." 5 seconds ago. What gives? Whatever exchange risks there are, they are isolated from goods merchants by btc processors (and coinbase is one of those).

Newscastix

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Quote from: Dargo on April 03, 2013, 09:30:13 AM

Quote from: Newscastix on April 03, 2013, 09:23:04 AM

Quote from: Dargo on April 03, 2013, 09:20:10 AM

Yes there are other exchanges, but most merchants are tied to Gox for the exchange rate.

How does that work? One cannot just dictate the price... Price depends on supply and demand... and if one exchange differs vastly, the arbitragers come to make some buck and it evens out....

Don't understand your comment. Of course price depends on supply and demand, and arbitrage can even out price difference across exchanges, but this isn't relevant to my point. I'm talking about merchants who need an exchange rate to price goods and services in BTC. Every BTC merchant I've seen looks to Gox for this. If Gox is down, these merchants are flying blind (though maybe some have a back up plan for this - I don't know).

Ah ok, i was talking about exchanges. For merchants you are right. I'd use the Gox price too as a merchant just because it has the highest trading volume and sorta "makes the price".

BitcoinTate

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Quote from: piramida on April 03, 2013, 09:33:38 AM

Quote from: Dargo on April 03, 2013, 09:30:13 AM

Don't understand your comment. Of course price depends on supply and demand, and arbitrage can even out price difference across exchanges, but this isn't relevant to my point. I'm talking about merchants who need an exchange rate to price goods and services in BTC. Every BTC merchant I've seen looks to Gox for this. If Gox is down, these merchants are flying blind (though maybe some have a back up plan for this - I don't know).

Which merchants look to gox? what for? which year is it now? There are several bitcoin payment processors; and if you wish to get fiat for your goods, you can be completely isolated from the going rate of BTC, and that's what most if not all merchants do. Now back to your misinformation - link to at least one merchant who is looking at gox for prices?

Coinbase for one.

piramida

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Borsche

Quote from: Dargo on April 03, 2013, 09:30:13 AM

Don't understand your comment. Of course price depends on supply and demand, and arbitrage can even out price difference across exchanges, but this isn't relevant to my point. I'm talking about merchants who need an exchange rate to price goods and services in BTC. Every BTC merchant I've seen looks to Gox for this. If Gox is down, these merchants are flying blind (though maybe some have a back up plan for this - I don't know).

Which merchants look to gox? what for? which year is it now? There are several bitcoin payment processors; and if you wish to get fiat for your goods, you can be completely isolated from the going rate of BTC, and that's what most if not all merchants do. Now back to your misinformation - link to at least one merchant who is looking at gox for prices?

Dargo

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Quote from: Newscastix on April 03, 2013, 09:23:04 AM

Quote from: Dargo on April 03, 2013, 09:20:10 AM

Yes there are other exchanges, but most merchants are tied to Gox for the exchange rate.

How does that work? One cannot just dictate the price... Price depends on supply and demand... and if one exchange differs vastly, the arbitragers come to make some buck and it evens out....

Don't understand your comment. Of course price depends on supply and demand, and arbitrage can even out price difference across exchanges, but this isn't relevant to my point. I'm talking about merchants who need an exchange rate to price goods and services in BTC. Every BTC merchant I've seen looks to Gox for this. If Gox is down, these merchants are flying blind (though maybe some have a back up plan for this - I don't know).

wopwop

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people dont give a shit about other exchanges

you only exchange AAPL on one exchange (NASDAQ), not several

piramida

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Borsche

The exchanges are arbitraged, but nothing prevents the price from going down ($130 at bitstamp at the moment) or up even if gox is completely gone. But I agree, it's a good thing that Gox gets hit often, people will spread the trading out so other exchanges have more volume.

As for merchants, they use bitpay and don't care about the exchange. All risks and exchanges used are up to processor (bitpay) and they work just fine now.

Newscastix

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Quote from: Dargo on April 03, 2013, 09:20:10 AM

Yes there are other exchanges, but most merchants are tied to Gox for the exchange rate.

How does that work? One cannot just dictate the price... Price depends on supply and demand... and if one exchange differs vastly, the arbitragers come to make some buck and it evens out....

Topic: Not so "decentralized" currency... (Read 1717 times)