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Topic: Put the Gox Down and Step Away. Ideas: How to make a Pro BTC Exchange (Read 1953 times)

full member
Activity: 137
Merit: 100
I was thinking Stay Puft, but Gozer said Grover
wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley

A better market for BTC will lead to a more stable price and better acceptance of BTC from merchants.

Assume you got a bar: You want to get paid in BTC but want to be sure you get about 4$ for each bear. How can you be sure you get 4$ +/-1% if the prices goes up and down 30% every day and the biggest exchange is unable to handle trading several times a week?

that's just mainstream competitive market thinking with the perspective of viewing BTC as a commodity instead of a currency. i am from australia, can't speak for all australians, but in general, when someone buys or sells a beer here, we don't check the price of USD at the markets to make sure the beer costs US$4, we simply have a price for the beer in AU$4 with the understanding that AU$4 will still be worth AU$4 when it is next exchanged. the value of AU$4 against USD, or the volatility of that conversion is not a concern to the buyer or the seller as they're circulating the currency quick enough for it to not effect them. the exchange rate and liquidity are only really relevant if you are investing in currency and holding onto it. similarly, if your bartender just thinks about selling the beer for 0.04BTC and there is a big enough economy for him to spend that 0.04BTC and acquire goods and services with the same value as the beer, he doesn't really need to worry much about the conversion rate to $, only make periodic adjustments when the goods or services they're buying increase or decrease in BTC value.

another good example of alternative thinking are bitcoin brokers (as opposed to exchanges); those that set their prices based on their own supply of $ and BTC or 24 hour market averages are a lot less volatile.

This is why BTC needs a stable exchange.  IDC that people think BTC has value because people can purchase goods/services with BTC since the valuation of BTC rises so much who would want to spend BTC buying a fixed price or depreciating asset?

Due to Gox BTC's salad days may, I stress may, be nearing an end.  I say this because of all the recent hype and now Gox has Goxed BTC and any and all goodwill new people had towards BTC.  BTC because of Gox is now no different than a boilerroom looking for new suckers to buy into BTC and get crapped all over and then sell BTC at 1/2 -1/4 the price they bought it for.  I know this is not what "smart" or "astute" investors/traders would do, but that's the point. All the recent new money just got fleeced and Goxed over.

To me for BTC to remain viable over a longer period of time the majority of the community must decide on a equitable trading system.  As we see yet again today Gox is not that system since a few bots can destabilize their trading engine on what was really a pretty low volume day.  This problem is more serious than people seem to admit since Gox stated they allegedly upped their trades/sec by 50x.  I guess that means Gox's engine can now handle 50 calls a second, up fro 1 call a second.

IDC is it's this thread or the threads linked on the first page, but for BTC to accomplish anything other than massive embarrassment a few powerful people must do something or a large group of regular folks must learn to work as a group, decide on a plan and not everyone act like they're the chief while the group is trying to implement the plan.
newbie
Activity: 16
Merit: 0
wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley

A better market for BTC will lead to a more stable price and better acceptance of BTC from merchants.

Assume you got a bar: You want to get paid in BTC but want to be sure you get about 4$ for each bear. How can you be sure you get 4$ +/-1% if the prices goes up and down 30% every day and the biggest exchange is unable to handle trading several times a week?

that's just mainstream competitive market thinking with the perspective of viewing BTC as a commodity instead of a currency. i am from australia, can't speak for all australians, but in general, when someone buys or sells a beer here, we don't check the price of USD at the markets to make sure the beer costs US$4, we simply have a price for the beer in AU$4 with the understanding that AU$4 will still be worth AU$4 when it is next exchanged. the value of AU$4 against USD, or the volatility of that conversion is not a concern to the buyer or the seller as they're circulating the currency quick enough for it to not effect them. the exchange rate and liquidity are only really relevant if you are investing in currency and holding onto it. similarly, if your bartender just thinks about selling the beer for 0.04BTC and there is a big enough economy for him to spend that 0.04BTC and acquire goods and services with the same value as the beer, he doesn't really need to worry much about the conversion rate to $, only make periodic adjustments when the goods or services they're buying increase or decrease in BTC value.

another good example of alternative thinking are bitcoin brokers (as opposed to exchanges); those that set their prices based on their own supply of $ and BTC or 24 hour market averages are a lot less volatile.
sr. member
Activity: 406
Merit: 250
Excellent. I understand better now.
sr. member
Activity: 434
Merit: 250
In Hashrate We Trust!
Hi Gollum,

I believe that your 100% correct. How would we get around the FINCen regs for multiple exchanges.

Legal problems should be solved by the brokers in each country - not by us.

What we want to accomplish should actually not affect the legal issues - it is just a technical issue.

Instead of MtGox and BitStamp and XYZ having the order processing inhouse, they outsource that part to thousands of miners around the world.
The brokers need to do legal bullshit today, and they will still need to do that shit with a p2p exchange.
That is not the exchanges problem - since the exchange is only a blockchain just like bitcoin itself.

I can bet this p2p exchange will be more secure, more stable than the big exchanges at Wall Street, at least we wont have HFT-algos robbing the rest of the market every nanosecond.
sr. member
Activity: 406
Merit: 250
Hi Gollum,

I believe that your 100% correct. How would we get around the FINCen regs for multiple exchanges.
sr. member
Activity: 434
Merit: 250
In Hashrate We Trust!
Not a tech person, but I firmly now believe that the DDoS attack is coming from a competitor.  Yesterday i visited a certain exchange to view prices because it performed well and there was even a troll box that had the posts of 12 years olds that made things amusing. This GOX competitor was the only site that my Laptop went to yesterday, it stayed on that site. At the end of the day when I went to shut my laptop down, the cursor was frozen and as a result the laptop was locked up. I cntrl+alt+del and restarted my laptop but the issue remained the same once the laptop completed loaded.  The GOX competitor I speak of is the shady Russian one that didn't go down when all the other exchanges were failing. So something is weird with them. 

So enough of my digression, how would what is being posted here solved the issue of DDoS and other attacks, especially if these attacks are coming from highly organizationed individuals/groups?



So far no one has been able to DDOS the bitcoin itself since it is p2p.
The brokers sites might of course go down even if we have a p2p exchange -  but when you got a huge p2p exchange with 100s of brokers connected to it the chance is slim that such groups would be able to shut down all brokers at the same time.
sr. member
Activity: 406
Merit: 250
Not a tech person, but I firmly now believe that the DDoS attack is coming from a competitor.  Yesterday i visited a certain exchange to view prices because it performed well and there was even a troll box that had the posts of 12 years olds that made things amusing. This GOX competitor was the only site that my Laptop went to yesterday, it stayed on that site. At the end of the day when I went to shut my laptop down, the cursor was frozen and as a result the laptop was locked up. I cntrl+alt+del and restarted my laptop but the issue remained the same once the laptop completely loaded.  The GOX competitor I speak of is the shady Russian one that didn't go down when all the other exchanges were failing. So something is weird with them.  

So enough of my digression, how would what is being proposed here solve the issue of DDoS and other attacks, especially if these attacks are coming from highly organized individuals/groups?

sr. member
Activity: 434
Merit: 250
In Hashrate We Trust!
wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley

A better market for BTC will lead to a more stable price and better acceptance of BTC from merchants.

Assume you got a bar: You want to get paid in BTC but want to be sure you get about 4$ for each bear. How can you be sure you get 4$ +/-1% if the prices goes up and down 30% every day and the biggest exchange is unable to handle trading several times a week?
newbie
Activity: 16
Merit: 0
wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley
sr. member
Activity: 434
Merit: 250
In Hashrate We Trust!


I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.

The p2p exchange will only handle the order book and order matching and create a virtual exchange of brokers!
It is the brokers responsibility to handle fiat, bitcoins or whatever asset they enable trading in.

Please read the git so you understand more about the solution we are talking about:
https://github.com/p2p/bitcoin-exchange
https://bitcointalksearch.org/topic/p2p-exchange-for-bitcoin-172705
newbie
Activity: 55
Merit: 0
Wouldn't an exchange such as the Silk Road work?

That's a black market, not an exchange...


(Drugs are fun to try though..)
sr. member
Activity: 420
Merit: 252
https://ubikiri.com/
Wouldn't an exchange such as the Silk Road work?
full member
Activity: 137
Merit: 100
I was thinking Stay Puft, but Gozer said Grover
...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.

I pretty much agree and a multitude will pop up as time goes on.

The problem is right now of all exchanges in existence, and there are many, Mt.Gox has about 80% of all trade volume by themselves. As Bitcoin grows, and it has been doing so exponentially, so will the magnitude of Mt.Gox's top heavy share of trade.

That's why they got over loaded - their press release even says so - and why I think the solution is supporting and recommending other exchanges now.

Seems to me that so far exploiting the arbitrage possibilities between exchanges is a real issue in that not all exchanges are equal in regards to the ability to withdraw fiat.

This FX based idea has a lot of merit.

Make a startup called 'Secure bitcoin holdings'. You make a pool of offline coins and use multisig for secure transactions.

Now approach every single existing Forex trading company. You become their 'banking' partner for bitcoins. When customer pays into your cold wallet, your software notifies the FX company how many funds to credit internally in their exchange.

FX company goes into settings, activates 'BTC' alongside USD, EUR, CAD ect. Trading happens as usual using the professional FX trading engine and infrastructure.

When customer withdraws, instead of asking the bank to send a wire they ask you to send the coins. Let them handle the fiat side of things they just need a competent non clownshoes operation with funding for insurance that can handle the bitcoin transactions.

Now professional trading is available. Big traders on these forex sites can now decentralize to trade locally for cash and other instruments. For instance I would pay in $100,000 sitting on the exchange in fiat waiting to trade.
I would sell bitcoins out of a store and if I needed more coins, do a trade and withdraw to customer using the FX company.
legendary
Activity: 1050
Merit: 1002
...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.

I pretty much agree and a multitude will pop up as time goes on.

The problem is right now of all exchanges in existence, and there are many, Mt.Gox has about 80% of all trade volume by themselves. As Bitcoin grows, and it has been doing so exponentially, so will the magnitude of Mt.Gox's top heavy share of trade.

That's why they got over loaded - their press release even says so - and why I think the solution is supporting and recommending other exchanges now.
mrb
legendary
Activity: 1512
Merit: 1028
...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.
legendary
Activity: 1050
Merit: 1002


I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.

I actually haven't had time to read through the first two links. The last thread is mine (someone posted the other links in my thread) for a much simpler idea: the community supports existing exchanges more.
full member
Activity: 137
Merit: 100
I was thinking Stay Puft, but Gozer said Grover


I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.
hero member
Activity: 899
Merit: 1002
Make a startup called 'Secure bitcoin holdings'. You make a pool of offline coins and use multisig for secure transactions.

Now approach every single existing Forex trading company. You become their 'banking' partner for bitcoins. When customer pays into your cold wallet, your software notifies the FX company how many funds to credit internally in their exchange.

FX company goes into settings, activates 'BTC' alongside USD, EUR, CAD ect. Trading happens as usual using the professional FX trading engine and infrastructure.

When customer withdraws, instead of asking the bank to send a wire they ask you to send the coins. Let them handle the fiat side of things they just need a competent non clownshoes operation with funding for insurance that can handle the bitcoin transactions.

Now professional trading is available. Big traders on these forex sites can now decentralize to trade locally for cash and other instruments. For instance I would pay in $100,000 sitting on the exchange in fiat waiting to trade.
I would sell bitcoins out of a store and if I needed more coins, do a trade and withdraw to customer using the FX company.



full member
Activity: 215
Merit: 100
Shamantastic!
full member
Activity: 137
Merit: 100
I was thinking Stay Puft, but Gozer said Grover
We should just put our resources to developing an opensource exchange framework, then release it.  Exchanges will popup, with different rules, fees, etc.  The best will be used, the rest will crumble.

Very good idea.  I'm not trying to argue, merely play some devil's advocate.

How would this stop any one closely held exchange possibly taking over BTC and holding the entire community hostage to their ineptness and greed in the form of any deals they make with entities known and unknown to provide services? 

Gox is the prime example in that they sold to ConLab [CoinLab] when ConLab has ZERO experience in running an exchange, they stumbled upon the idea/opportunity and got the VC funding to make it happen.

So basically the fate of BTC has just been sold to the very posers that be, that the BTC community seems to think they're fighting.  It makes zero sense to me, other than the veil of pure avarice and greed has covered the eyes of a great many early adopters of BTC since they're now getting fiat bank.

Don't get me wrong I understand BTC is purely a means by which to gain fiat while bemoaning fiat as a bastard child.  If the BTC community was above fiat then there would be zero fiat exchanges.
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