Please see this page:
https://en.bitcoin.it/wiki/Ripple_currency_exchange
Note that this is NOT the same thing as what's happening at ripple.com - the page above describes the design of a theoretical system that hasn't been built yet. It uses the concept of settlements moving through a social network with an alternative chain that tracks credit relationships and the flow of fiat through the social graph.
This was also the last slide in my 2012 talk:
https://www.youtube.com/watch?feature=player_embedded&v=mD4L7xDNCmA
(scan to the last few minutes)
Topic: P2P Exchange for bitcoin - page 20. (Read 42804 times)
There is a great collection of ideas here, and it looks like everyone has the same end of the stick.
The brokers become the gateway into the exchange. They deal with the fiat. In theory, you end up with a localbitcoins mixed with mtgox, but all using the same exchange matching data.
The way I see it, is that the brokers sell a digital local currency token for a fraction more than face value.
The exchange shows the bitcoin and the LCT price, and buyers and sellers do their deals on these prices.
That LCT is the currency of brokers, and has a fixed value. When the customer buys or sells bitcoins and wants to go back to fiat, they sell their LCT back to the broker for a fraction less than face value. The broker makes money on this difference.
It also means that the fiat doesn't need to leave the country, meaning that brokers don't get involved with expensive financial regulations because we are only taking tokens here!
It does sort of mean that bitcoins get bought and sold with altcoins, but at least it is scaleable, where the current system isn't!
Am I on to something here?
The brokers become the gateway into the exchange. They deal with the fiat. In theory, you end up with a localbitcoins mixed with mtgox, but all using the same exchange matching data.
The way I see it, is that the brokers sell a digital local currency token for a fraction more than face value.
The exchange shows the bitcoin and the LCT price, and buyers and sellers do their deals on these prices.
That LCT is the currency of brokers, and has a fixed value. When the customer buys or sells bitcoins and wants to go back to fiat, they sell their LCT back to the broker for a fraction less than face value. The broker makes money on this difference.
It also means that the fiat doesn't need to leave the country, meaning that brokers don't get involved with expensive financial regulations because we are only taking tokens here!
It does sort of mean that bitcoins get bought and sold with altcoins, but at least it is scaleable, where the current system isn't!
Am I on to something here?
But is that not in the hands of a few people? ( Not decentralized.)
First, yeah, look into P2Pool code. 10 second blocks, pruned blockchain, very nicely distributed. Might even be better if instead if a 0.001% fee, placing an order was free, and all orders that did not complete that are older than a day or two simply feel off the tail end of the block chain. Only charge a fee for completed orders. That way people can still put up and move walls, and if need be, resubmit their order every few days, without making the blockchain too bloated.
That said, there's still the problem of fiat money:
* How will it be stored? Will people wishing to act as brokers have to accept cash into their banks and store all the money in their checking accounts? If then don't get a business account, there's a risk of their account being flagged for suspicious activity and frozen, making other people's money go poof.
* Thanks to FinCEN, anyone wishing to be a broker will likely need a license. I'm guessing not cheap.
* Still huge issue with fraud and chargebacks. Brokers will be required to take on the risk of having scammers reverse deposits.
* How would bitcoins be transferred? Also through the broker? I'm concerned that if it's automatic, as a requirement to complete and close the order, the buyer of BTC might get his coins, while the seller might discover that there isn't any cash waiting for him at the brokerage (I guess trust issues)
* Last, depending on how the process will work, I'm not entirely sure this idea is possible from a technological point of view.
Other than that, I can't really think of any other issues.
That said, there's still the problem of fiat money:
* How will it be stored? Will people wishing to act as brokers have to accept cash into their banks and store all the money in their checking accounts? If then don't get a business account, there's a risk of their account being flagged for suspicious activity and frozen, making other people's money go poof.
* Thanks to FinCEN, anyone wishing to be a broker will likely need a license. I'm guessing not cheap.
* Still huge issue with fraud and chargebacks. Brokers will be required to take on the risk of having scammers reverse deposits.
* How would bitcoins be transferred? Also through the broker? I'm concerned that if it's automatic, as a requirement to complete and close the order, the buyer of BTC might get his coins, while the seller might discover that there isn't any cash waiting for him at the brokerage (I guess trust issues)
* Last, depending on how the process will work, I'm not entirely sure this idea is possible from a technological point of view.
Other than that, I can't really think of any other issues.
I just read over your post and understood fully your proposal as i did think the same as well. What i'm afraid is you will run into concurrency issue with the matching algorithm. We need the orderbook to be as realtime as possible. The price/time priority is not easy to handle.
Yes, I hope many of us can agree on a template for a decentralized exchange-broker system so we can make the BitCoin trading (or any other asset trading) more stable and secure!
I must say, great mind think a like.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
We've been trying to figure out how to do a decentralized exchange for about two years now. The problem is figuring out how to store fiat (USD/EUR) in a decentralized way. No one has figured that one out yet. If you figure it out, let us know.
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
Yes, I hope many of us can agree on a template for a decentralized exchange-broker system so we can make the BitCoin trading (or any other asset trading) more stable and secure!
I must say, great mind think a like.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
We've been trying to figure out how to do a decentralized exchange for about two years now. The problem is figuring out how to store fiat (USD/EUR) in a decentralized way. No one has figured that one out yet. If you figure it out, let us know.
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
I must say, great mind think a like.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
I started this a week ago, all by myself. I do have my day job that feed the family tho so i'm working on this part time:
We've been trying to figure out how to do a decentralized exchange for about two years now. The problem is figuring out how to store fiat (USD/EUR) in a decentralized way. No one has figured that one out yet. If you figure it out, let us know.
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
But then, if we could figure out how to store and transfer fiat in a decentralized way, we really wouldn't need Bitcoin, either (except for the inflation thing)
Rassah,
First of all English isnt my mother tongue. Having said that, here is my proposal (i actually started this already on my own)
The problem with exchanges we have right now isnt about whos holding fund, its about orderbook is centralized (controlled by one entity). When MtGox is attacked and caused panic, 80% of btc trading is at mercy of this attack.
What we need is to decentralize the orderbook. A distributed orderbook system if you will. All the exchanges will just be front end and handle funds holding ...etc ( so they only compete thro customer service, fees and local banking connection)
To do this we need a new matching engine. One that can deal inserts and match operation per price level concurrently.
Thats roughly the idea. I know its hard to see the concept, but i will do a better presentation when the time comes.
Any questions or feedbacks please let me know.
I found this projects that are aiming for the same goal: a p2p exchange for different assets. But none of them handles the issue of settlement in a realistic way.
I believe that we need brokers in a p2p exchange to ensure trust in a massive scale.
P2PX https://bitcointalksearch.org/topic/please-delete-62879
Dark Exchange https://bitcointalksearch.org/topic/beta-dark-exchange-a-100-decentralized-p2p-exchange-26063
BitcoinX http://www.bitcoinx.org/
I believe that we need brokers in a p2p exchange to ensure trust in a massive scale.
P2PX https://bitcointalksearch.org/topic/please-delete-62879
Dark Exchange https://bitcointalksearch.org/topic/beta-dark-exchange-a-100-decentralized-p2p-exchange-26063
BitcoinX http://www.bitcoinx.org/
would be also nice to have p2pool for standard and blockchain price on the client.
also hidden service integration and .bit dns on tor ,openvpn to connect the p2p net
and namecoin to hold the ca for it
also hidden service integration and .bit dns on tor ,openvpn to connect the p2p net
and namecoin to hold the ca for it
But I trust a P2P open order book more than I can trust the orderbook of a server that easily can be hacked or ddosed.
So, effectively, the brokers publish promises as their order book?
Does this get linked to a particular customer? If you place a sell order, you then see it on the public list? How are cancels handled?
In theory, you could have the exchanges actually act as banks. For example, they could issue chaum digital cash. Mt. Gox could give you 10 Mt. Gox dollar for $10 and buy 10 of them back for $9.90 (or whatever spread made them profitable).
These "dollars" could then be traded using a alt-chain.
In fact, you could exploit the main chain if you wanted to. You could use the coloured coin idea with 1 satoshi coins = $1. Basically, coins generated from a particular source would be alt-coins. For example, if the coin came from a particular address. However, an alt chain might be better.
However, it is done, mints convert fiat to/from digital tokens and then they can be handled digitally.
Ripple is a wallet, not an exchange matching orders.
But I trust a P2P open order book more than I can trust the orderbook of a server that easily can be hacked or ddosed.
So, effectively, the brokers publish promises as their order book?
Does this get linked to a particular customer? If you place a sell order, you then see it on the public list? How are cancels handled?
In theory, you could have the exchanges actually act as banks. For example, they could issue chaum digital cash. Mt. Gox could give you 10 Mt. Gox dollar for $10 and buy 10 of them back for $9.90 (or whatever spread made them profitable).
These "dollars" could then be traded using a alt-chain.
In fact, you could exploit the main chain if you wanted to. You could use the coloured coin idea with 1 satoshi coins = $1. Basically, coins generated from a particular source would be alt-coins. For example, if the coin came from a particular address. However, an alt chain might be better.
However, it is done, mints convert fiat to/from digital tokens and then they can be handled digitally.
But I trust a P2P open order book more than I can trust the orderbook of a server that easily can be hacked or ddosed.
So, effectively, the brokers publish promises as their order book?
Does this get linked to a particular customer? If you place a sell order, you then see it on the public list? How are cancels handled?
In theory, you could have the exchanges actually act as banks. For example, they could issue chaum digital cash. Mt. Gox could give you 10 Mt. Gox dollar for $10 and buy 10 of them back for $9.90 (or whatever spread made them profitable).
These "dollars" could then be traded using a alt-chain.
In fact, you could exploit the main chain if you wanted to. You could use the coloured coin idea with 1 satoshi coins = $1. Basically, coins generated from a particular source would be alt-coins. For example, if the coin came from a particular address. However, an alt chain might be better.
However, it is done, mints convert fiat to/from digital tokens and then they can be handled digitally.
Yes the order book will match promises of a deal containing the exchange of bitcoin against fiat. Or bitcoin against potatoes. Or cows against pigs. Or 1 oz gold against BTC... but the preferred exchange would of course be BTC/USD.
The exchange part itself relies on trust since the P2P network cannot handle fiat, potatoes, cows, pigs or gold without the involvement of some kind of broker or bank.
Addition to the functionality:
-Anybody who desires can become a broker, you, me, Mr Scam, Mr Spam, Mr Fraud, MtGox, BTCE, ICBIT, SaxoBank, IGMarkets, Interactive Brokers, Scot Trade..
But to prevent market manipulation or fraud against honest brokers, each broker can list other brokers they trust in their "wallet". And if both parties got eachother in their wallets, the miners will match their orders.
If MtGox dont trust other brokers the result will be that only MtGox client orders will be matched against each other.
If ICIBit and BTCE trust each other, all their orders will be matched against each other.
If I have 2...N friends trusting me, I can act as a broker, putting their orders and they can trade against eachother through me.
If mr Scam have 2...N friends trusting him, he will act as a broker, but the only ones losing money because of him not paying out peoples coins or dollars will be his clients, not MtGox clients or my friends.
-Transaction fees are paid to miners on a percentage basis (0.001%) regardless of actual execution or not in order to prevent market manipulation orders and order spamming. Withdrawn orders will not pay back fee.
-Orders are matched in one-minute auctions in the block chain and randomnes is used if several orders are at the same level and size. High Frequency Trading are thereby eliminated since there is no possibility to cheat in the order book, or to do nanosecond trading since there is one minute between every execution of orders.
-Anybody who desires can become a broker, you, me, Mr Scam, Mr Spam, Mr Fraud, MtGox, BTCE, ICBIT, SaxoBank, IGMarkets, Interactive Brokers, Scot Trade..
But to prevent market manipulation or fraud against honest brokers, each broker can list other brokers they trust in their "wallet". And if both parties got eachother in their wallets, the miners will match their orders.
If MtGox dont trust other brokers the result will be that only MtGox client orders will be matched against each other.
If ICIBit and BTCE trust each other, all their orders will be matched against each other.
If I have 2...N friends trusting me, I can act as a broker, putting their orders and they can trade against eachother through me.
If mr Scam have 2...N friends trusting him, he will act as a broker, but the only ones losing money because of him not paying out peoples coins or dollars will be his clients, not MtGox clients or my friends.
-Transaction fees are paid to miners on a percentage basis (0.001%) regardless of actual execution or not in order to prevent market manipulation orders and order spamming. Withdrawn orders will not pay back fee.
-Orders are matched in one-minute auctions in the block chain and randomnes is used if several orders are at the same level and size. High Frequency Trading are thereby eliminated since there is no possibility to cheat in the order book, or to do nanosecond trading since there is one minute between every execution of orders.
But I trust a P2P open order book more than I can trust the orderbook of a server that easily can be hacked or ddosed.
So, effectively, the brokers publish promises as their order book?
Does this get linked to a particular customer? If you place a sell order, you then see it on the public list? How are cancels handled?
In theory, you could have the exchanges actually act as banks. For example, they could issue chaum digital cash. Mt. Gox could give you 10 Mt. Gox dollar for $10 and buy 10 of them back for $9.90 (or whatever spread made them profitable).
These "dollars" could then be traded using a alt-chain.
In fact, you could exploit the main chain if you wanted to. You could use the coloured coin idea with 1 satoshi coins = $1. Basically, coins generated from a particular source would be alt-coins. For example, if the coin came from a particular address. However, an alt chain might be better.
However, it is done, mints convert fiat to/from digital tokens and then they can be handled digitally.
How do you ensure settling up? If an offer is accepted, both parties are told to settle up offline?
Would settling up be considered a broker feature and not a part of the main exchange?
Yes the settling must be the reponsibility of the brokers. Thats why we need the brokers in the first place - I trust MtGox more than I can trust a random guy at ebay or IRC.
But I trust a P2P open order book more than I can trust the orderbook of a server that easily can be hacked or ddosed.
The settlement should be handled by the brokers. The exchange block chain is only for handling this parts:
-brokerid
-clientid
-orderid
-ordertype
-amount
-price
The miners job is to match orders
so when this 2 orders get matched it is up to the brokers to handle the real transaction of the bitcoins and the money.
The biggest issue here is of course the exchange of USD between the brokers (MtGox, BTCE, Icbit...) but if they trust eachother they can settle with bitcoins or dollars once every night, or once every week.
brokerid = MTGOX
clientid = noob1
orderid = 1000
ordertype = BUY
amount = 1 (BTC)
price = 150 (USD)
brokerid = BTCE
clientid = noob2
orderid = 1001
ordertype = SELL
amount = 1 (BTC)
price = 150 (USD)
-brokerid
-clientid
-orderid
-ordertype
-amount
-price
The miners job is to match orders
so when this 2 orders get matched it is up to the brokers to handle the real transaction of the bitcoins and the money.
The biggest issue here is of course the exchange of USD between the brokers (MtGox, BTCE, Icbit...) but if they trust eachother they can settle with bitcoins or dollars once every night, or once every week.
brokerid = MTGOX
clientid = noob1
orderid = 1000
ordertype = BUY
amount = 1 (BTC)
price = 150 (USD)
brokerid = BTCE
clientid = noob2
orderid = 1001
ordertype = SELL
amount = 1 (BTC)
price = 150 (USD)
How do you ensure settling up? If an offer is accepted, both parties are told to settle up offline?
Would settling up be considered a broker feature and not a part of the main exchange?
How do you ensure settling up? If an offer is accepted, both parties are told to settle up offline?
Ripple is owned by a company. Im talking about a free model of ripple where everyone can "mine".
There is already a project that is moving in this direction:
https://ripple.com
https://ripple.com
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