The market for stock / futures exchanges and forex is really huge, if we can create a p2p exchange that is paid with bitcoin that would mean a lot to bitcoin as a currency.
This is the revenues of the worlds greatest exchanges in the year 2012:
CME Group $ 3.0B
Nasdaq OMX Group $ 3.1B
NYSE Euronext $ 3.5B
London Stock Exchange $ 1.2B
The revenues of the Forex exchanges is not known since it is a decentralized OTC-market, but if we assume that their revenues also are in billions and add up all worlds stock and futures exchanges we would probably end up with a market worth up to 100B worth of revenues per year.
If the p2p exchange market paid by bitcoin captures 1% of the global exchange market that means 1 billions dollar worth of bitcoins each year must be used to reward the exchange miners.
Topic: P2P Exchange for bitcoin - page 14. (Read 42783 times)
We need to contact this guy http://www.reddit.com/r/Bitcoin/comments/1c7v6z/buttercoin_open_source_highperformance_bitcoin/
Already over there... The project is at: http://buttercoin.hackpad.comIt's a bit differently-structured now, but I've filled them in on my idea a bit.
Interesting. We might end up contributing to their project.
Or if their goals differ to much from ours at bitcointalk we should develop our own exchange system.
All of these ideas floating around here rely on already existent exchanges to facilitate a 'p2p exchange'. If this were p2p i could convert my fiat into coins and back without any sort of legal intermediary.
Not all of them.
Mine puts a seller into contact with a buyer. I need to just get it done and stop posting about it probably... I need a PHP programmer.Even your idea could be implemented in the p2p exchange we are discussing in this thread:
One exchange containing many virtual exchanges running at the same time, side by side.
each virtual exchange can consist of one or many brokers.
It is up to the brokers of each virtual exchange to decide if they want to trade real fiat dollar
or only some kind of token-dollar to solve the legal issues of some jurisdictions.
Please read through the template and come with ideas and suggestions!
https://github.com/p2p/bitcoin-exchange
In the interests of keeping things in a single thread, I am reposting the below. Since the value of coloured coins cannot be monitored by the main bitcoin network, atomic operations on the main chain have to be initiated by the BTC buyer.
Under a system like that, the exchange would be like a bulletin board. However, when you contact a node, their software would be monitoring the market, and wouldn't buy if you asked for more than market price.
This doesn't allow "offline" operation, where you can just post an order to the order book.
Quote from: me
If coloured coins are used, then you can have a trade which is signed by both participants. If it is included in the main bitcoin chain, then it counts, otherwise, it is fully reversed.
The buyer creates an offer transaction of the form:
Input 0: (0.000001, coloured) -> signed by BTC buyer with "SIGHASH_ANYONECANPAY + SIGHASH_SINGLE"
Output 0: (10) -> "Send to buyer's address"
This transaction is invalid, so can't be submitted to the main network. However, the SIGHASH_ANYONECANPAY rule allows someone to add extra inputs to the transaction. The SIGHASH_SINGLE rule allows adding of more outputs.
Input 0: (0.000001, coloured) -> signed by BTC buyer with "SIGHASH_ANYONECANPAY + SIGHASH_SINGLE"
Input 1: (10 + fee, coloured) -> signed by BTC seller (i.e. $ buyer)
Output 0: (10) -> "Send to buyer's address"
Output 1: (0.000001, coloured) -> "Send to seller's address"
It is now a valid transaction. If the transaction makes it into the chain, then the trade occurs. It not, then it is reversed. It is atomic, it either fully works, or fully fails.
This system allows 2 people to trade. It lets a buyer post "Will buy 10BTC for $1000". However, for an exchange, you want to post "Will buy 10BTC for $1000 or market price, if lower".
The buyer creates an offer transaction of the form:
Input 0: (0.000001, coloured) -> signed by BTC buyer with "SIGHASH_ANYONECANPAY + SIGHASH_SINGLE"
Output 0: (10) -> "Send to buyer's address"
This transaction is invalid, so can't be submitted to the main network. However, the SIGHASH_ANYONECANPAY rule allows someone to add extra inputs to the transaction. The SIGHASH_SINGLE rule allows adding of more outputs.
Input 0: (0.000001, coloured) -> signed by BTC buyer with "SIGHASH_ANYONECANPAY + SIGHASH_SINGLE"
Input 1: (10 + fee, coloured) -> signed by BTC seller (i.e. $ buyer)
Output 0: (10) -> "Send to buyer's address"
Output 1: (0.000001, coloured) -> "Send to seller's address"
It is now a valid transaction. If the transaction makes it into the chain, then the trade occurs. It not, then it is reversed. It is atomic, it either fully works, or fully fails.
This system allows 2 people to trade. It lets a buyer post "Will buy 10BTC for $1000". However, for an exchange, you want to post "Will buy 10BTC for $1000 or market price, if lower".
Under a system like that, the exchange would be like a bulletin board. However, when you contact a node, their software would be monitoring the market, and wouldn't buy if you asked for more than market price.
This doesn't allow "offline" operation, where you can just post an order to the order book.
We need to contact this guy http://www.reddit.com/r/Bitcoin/comments/1c7v6z/buttercoin_open_source_highperformance_bitcoin/
Already over there... The project is at: http://buttercoin.hackpad.comIt's a bit differently-structured now, but I've filled them in on my idea a bit.
All of these ideas floating around here rely on already existent exchanges to facilitate a 'p2p exchange'. If this were p2p i could convert my fiat into coins and back without any sort of legal intermediary.
Not all of them.
Mine puts a seller into contact with a buyer. I need to just get it done and stop posting about it probably... I need a PHP programmer. 
We need to contact this guy http://www.reddit.com/r/Bitcoin/comments/1c7v6z/buttercoin_open_source_highperformance_bitcoin/
Quote
1. Your concerns about how to port in real-world cash are unfounded. There already exists an industry of businesses that will take cash in many forms and give virtual credits, including bitcoins, for them... BitInstant, Dwolla, OKPay, coinbase, ArumXchange, and many others can upload cash into this exchange in one or more forms. Let them deal with this headache; there are many of them so there is no central point of failure there.
An industry of business, you mean exchanges. All of these ideas floating around here rely on already existent exchanges to facilitate a 'p2p exchange'. If this were p2p i could convert my fiat into coins and back without any sort of legal intermediary.
As long as bitcoin exchanges with fiat currency, it should cooperate with fiat way of working, that is a centralized exchange (because fiat money is centralized). Bitcoin is a completion of existing financial system and provide another alternative, not to replace the existing sytem. Today's financial system exists for many reasons, and in many cases a centralized system has its benefit
www.cypherpunks.ca/otr/
Then you can make use of off the record with pidgin. Pidgin interfaces with AIM, ICQ, Google, etc. Off the record is a plugin which runs over it which supports encryption and perfect forward secrecy.
[/quote]
Wow. Sounds good, I will look into it.
Then you can make use of off the record with pidgin. Pidgin interfaces with AIM, ICQ, Google, etc. Off the record is a plugin which runs over it which supports encryption and perfect forward secrecy.
[/quote]
Wow. Sounds good, I will look into it.
BitMessage and P2Pool are also open source btw. Maybe someone could bug one of the developers to see what they think about whether their tech can be modified?
Just throwing this out there:
Take an idea similar to bitmessage, where everyone generates their own address ID. Everyone also stores their own coins, and their own USD.
The order book is shared to everyone running this client, and can be modified by anyone to add and remove only their own transaction requests, signed by their own ID. Some proof of work could me included so it takes a second or more to place your order so mitigate spamming by tons of transactions
Anyone is free to put up an order, either sell or buy, with their own conditions, such as method of payment (Dwolla/PayPal/Wire), fees for cash transfer, etc. The order book organizes these so that the fee is included in the price being traded (e.g. all PayPal trades could be 10% above wire trades, etc).
Once a match is found, the transaction is locked and is accessible only to the people executing it. It is then up to the two people to get in touch (possibly using bitmessage type system build right into this) and actually carry out the trade off the system, e.g. sending btc to someone after they send cash, etc.
Once the trade is executed successfully, both parties must mark the transaction as successful, which increases the reputation record of the address IDs. This can be done by both addresses signing that the transaction completed successfully, and will be in both parties' interest to store a copy of. Since both have to sign, those can't be faked. Tying this to the OTC WOT (bitcoin-otc web of trust) would help, too. Someone could try to game the system by trading with themselves, but the risk is that their offer will be picked up by someone else, which means they'll have to carry out the trade, or get a bad rating.
Eventually, certain high reputation level nodes will emerge to be able to handle transactions for those more skiddish, possibly at a higher fee.
Concerns: still may be possible to game the system, will likely be easily succeptible to scams and chargebacks (at least until trusted nodes emerge), will not be able to handle high frequency trades, may be difficult to fill a large order that spans many smaller ones (instant buy on MtGox), and finally may be extremely inconvenient to have to ask for cash from someone directly, v.s. just having a cold anonymous system do it for you.
Of course this could also be expanded to easily include trades of MtGox codes for BtC, too, in which case, like was mentioned, big trusted companies could be the money in-out places.
It seems we have a lot of bases we can start with for the code already, be it Ripple, P2Pool, or Bitmessage...
Take an idea similar to bitmessage, where everyone generates their own address ID. Everyone also stores their own coins, and their own USD.
The order book is shared to everyone running this client, and can be modified by anyone to add and remove only their own transaction requests, signed by their own ID. Some proof of work could me included so it takes a second or more to place your order so mitigate spamming by tons of transactions
Anyone is free to put up an order, either sell or buy, with their own conditions, such as method of payment (Dwolla/PayPal/Wire), fees for cash transfer, etc. The order book organizes these so that the fee is included in the price being traded (e.g. all PayPal trades could be 10% above wire trades, etc).
Once a match is found, the transaction is locked and is accessible only to the people executing it. It is then up to the two people to get in touch (possibly using bitmessage type system build right into this) and actually carry out the trade off the system, e.g. sending btc to someone after they send cash, etc.
Once the trade is executed successfully, both parties must mark the transaction as successful, which increases the reputation record of the address IDs. This can be done by both addresses signing that the transaction completed successfully, and will be in both parties' interest to store a copy of. Since both have to sign, those can't be faked. Tying this to the OTC WOT (bitcoin-otc web of trust) would help, too. Someone could try to game the system by trading with themselves, but the risk is that their offer will be picked up by someone else, which means they'll have to carry out the trade, or get a bad rating.
Eventually, certain high reputation level nodes will emerge to be able to handle transactions for those more skiddish, possibly at a higher fee.
Concerns: still may be possible to game the system, will likely be easily succeptible to scams and chargebacks (at least until trusted nodes emerge), will not be able to handle high frequency trades, may be difficult to fill a large order that spans many smaller ones (instant buy on MtGox), and finally may be extremely inconvenient to have to ask for cash from someone directly, v.s. just having a cold anonymous system do it for you.
Of course this could also be expanded to easily include trades of MtGox codes for BtC, too, in which case, like was mentioned, big trusted companies could be the money in-out places.
It seems we have a lot of bases we can start with for the code already, be it Ripple, P2Pool, or Bitmessage...
Geez. 6 pages before there's finally a reasonable post 
Thank you!
You're welcome. Thank you!Much of this does seem like it can be done by OpenTransactions or Ripple.
I'll look into OpenTransactions, but it can't possibly be this decentralized... An exchange house running on every client is pretty radical.As for Ripple, it is my understanding that it has incredibly major flaws, like not being open source, not being a real time trading platform at all, and has big problems moving larger amounts of money... It certainly isn't a replacement for Mt.Gox in that no wall street traders can find a way to use it to trade bitcoins versus the USD, now is it?
I'm still concerned about being able to execute trades without someone being able to take BTC (or a trade confirmation) and not send the USD/EUR. Has anyone come up with a way to verify that both parties have actually sent their part of the trade without relying on a central service?
I just did above. Every single client would be a 'central service' for the two other people involved.
I'm also not entirely sure something like a blockchain is necessary (why I was thinking something closer to ripple than bitcoin). I mean, there are two purposes to a blockchain: Keep a ledger, and prevent double-spends. We need the ledger, but that could just be a distributed file flying around, with some pruning involved (no need to keep executed trades). As for double-spend, if two people have traded, there's really no need to secure against it. All this system needs to do is match two traders and mark that their transaction was executed. A double-spend would be basically someone saying "I sent you these coins twice, so give me more USD", while the other guy could point to the BTC blockchain to say "Nope!"
Another fun thing I've been playing around with is Bitmessage. It basically does something like this, but with e-mail like messages, only holding a copy of yet-to-be received last two days, and removing any that were downloaded. It also encrypts all messages so that only the recipient can read them. If the messages that are in the form of buy/sell orders are not encrypted, people could just download all available ones too.
There's still the problem of sending and verifying cash though... So far, trusted brokers is the best idea I've heard.
P.S. Help out with bitmessage too if you can. I'm not involved, but it looks like a cool idea.
Another fun thing I've been playing around with is Bitmessage. It basically does something like this, but with e-mail like messages, only holding a copy of yet-to-be received last two days, and removing any that were downloaded. It also encrypts all messages so that only the recipient can read them. If the messages that are in the form of buy/sell orders are not encrypted, people could just download all available ones too.
There's still the problem of sending and verifying cash though... So far, trusted brokers is the best idea I've heard.
P.S. Help out with bitmessage too if you can. I'm not involved, but it looks like a cool idea.
Is there some sort of forum game being played called Ripple Bingo? Every other post seems to be someone saying - what about Ripple?
Which part of its not open source don't people understand?
Ripple is owned by a company who just want to be the next MT Gox - maybe
Yes, the software might work, but its not a decentralized exchange in the same spirit as bitcoin, so it doesn't pass the most important rule - the concept needs to be totally open for anyone to play with.
Its not the quickest way to get a result, but building this idea to the open standard that made bitcoin is a must!
Hope everyone agrees!
Which part of its not open source don't people understand?
Ripple is owned by a company who just want to be the next MT Gox - maybe
Yes, the software might work, but its not a decentralized exchange in the same spirit as bitcoin, so it doesn't pass the most important rule - the concept needs to be totally open for anyone to play with.
Its not the quickest way to get a result, but building this idea to the open standard that made bitcoin is a must!
Hope everyone agrees!
Two things I want to stress. This exchange has to be even more simple than mtGox. It should connect to people on Skype or AIM or ICQ etc ...
Skype is said to have a backdoor:
http://memeburn.com/2011/07/microsoft-and-skype-set-to-allow-backdoor-eavesdropping/
Then you can make use of off the record with pidgin. Pidgin interfaces with AIM, ICQ, Google, etc. Off the record is a plugin which runs over it which supports encryption and perfect forward secrecy.
I know this is against the free market but this thread should be PINNED! A P2P Exchange is a MUST and gollum has started us in the right direction. This need the full focus of the entire community right now. Maybe we should even start a fund for the developers.
I agree we need a fund but first we need to agree on a design and a plan. I'd be willing to throw a few bucks to a fund in exchange for shares or something to make sure we can get our money back.
Like a kickstarter where we fund the development of the exchange with Bitcoin to buy shares and then we get all our Bitcoin back WITH A PROFIT when the project is completed. This would allow Bitcointalk to gather enough funds in Bitcoin to hold up both for the Bitcoin (Xprize) contest and ultimately for the developers who decide to take on the role. Consider how much money could be at stake in terms of the long term profits on your Bitcon and consider also that to pay for this we could have transaction fees which would give us double what we paid in and it could be both profitable for us to invest in having the infrastructure built and profitable for the developers who would get paid by us to build it.
Who agrees with this idea? If you agree with this idea then lets figure out how to do it ASAP. Let's have either a contest to determine a design or let the programmers themselves create a bunch of kickstarters and bitcoin investment funds right away and let the community fund them all and see which team wins.
GO GO GO!
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