Topic: Solution for Exchanges? (Read 989 times)

Any coins that are 'In the market' HAVE to be stored on the exchange.. They cannot be stored by you.

Otherwise there is no guarantee that the trade can be fulfilled. Basically that you will or even can fulfil your end of the bargain.

If you do want that - use Ripple, that's how it works.

Well pointed Bob. The idea is a broker that just operate for % fee..

About the control of the wallet, I think it is possible to make it a step-by-step transaction in few minutes with the control in power of the seller and the buyer... All you have to do is facilitate the process... I think this can be a good business long term. You dont need to be trusted, the process is clear..

Especially with Gox, I am looking for alternatives.  This thread led me to the BitSimple website - wondering how they worked.  The suggestion is that they are a broker - which in my world means they are not in the middle of a transaction, but rather somehow generate a commission from the transaction. 

This seemed incredible unless you operated with some control of the wallet, which they say they don't.  In the future, I know this can technically occur when BIP 70-2 comes out in  bitcoin-d in 0.9, but not today.  I went to the BitSimple user agreement and read this:

3.6 When buying or selling bitcoin, you are buying or selling with BitSimple, LLC. BitSimple profits from the differences in the exchange rate offered to you and the exchange rate available to BitSimple. The rate offered to you is not guaranteed to be the best possible exchange rate available. BitSimple does not act as an intermediary or marketplace between other buyers and sellers of bitcoins.

So if I get this right, BitSimple is not a broker at all, but is a principal in a trade, and sets the buy sell prices at which BitSimple will purchase or sell bitcoin, not some third party for whom BitSimple is acting as a broker....

I note the 'spread' I saw was currently $20 per btc.  So if I sell 10btc through BitSimple - I'm really paying $200 implicit in the price?  It does not sound likey they are not a broker at all?  What am I missing?

Well, sorry for all that but I am at BitSimple site right now. It is really nice idea and I understand what you do. But the question is, at least for me, how you do it? Show the process and people will trust you..

It actually was no reverse marketing.  However, the dialog does illustrate that it is often difficult for people to think outside the box.  It also means that BitSimple needs to do a better job of explaining how we are more secure and why users don't need to settle for the status quo.  The first couple exchanges operated on a "deposit, wait 6 confirmations, then trade against other users" model.  This is one way of doing business but it has created a perception that it is the "only" way.  The box has been defined and now it is hard for people to look beyond it.   It just so happens that "this way" is the one that transfers all the risk from the exchange on to the depositors (who become unsecured creditors).   If the exchange is holding user funds and is unsecured and minimally capitalized (relative to the value of the deposits) who loses in the event of fraud, theft or loss?  The user of course.  The depositors in effect become uncompensated investors in the exchange.  If the exchange does well, the owners profit, if the exchange does bad, the depositors lose.  I mean it is a win-win situation for the exchange operator but not a good deal for the end user.

We may be biased but BitSimple is a better way; you keep your coins, secure in your wallet, where they belong and still have instant liquidity.  Until now that would mean a loss of liquidity as you would have to deposit and wait 6 confirmations in a potentially very volatile market.  The end result is as we was in MtGox collapse a large number of users just used MtGox as form of long term storage.  They did so because it gave them instant liquidity.   We are one option where the user can have absolute security and instant liquidity.   If BitSimple has coins stolen, lost, or defrauded it is the owners who lose, and not surprisingly that makes us very motivated to ensure that doesn't happen.

Bitcoin is stronger when individual users take direct control and responsibility for their own wealth.  Bitcoin was suppose to remove the need for "banks" and the first the community did is build new "banks".  The sad irony is that these "bitcoin banks" have historically been a far worse security risk than existing fiat banks.  That has to stop and while many may take this as pure marketing spin, I hope other companies look outside the box and come up with solutions which don't rely on centralized institutions holding massive amounts of user funds for extended periods of time.

Never used. If it works as I think, really nice. I buy bitcoin from a close friend that is a really early adoptor of bitcoin.

rafamadeira  bitsimple was the very first person to respond to you and responded in the affirmative, all other responses were less inviting yet you ignored the immediate and positive response to focus your attention on everyone else.

When I see things like that I think it's a backhanded marketing plan, I love to see those.

Nevertheless, have you used bitsimple's site, how do  you like it?

 

W

You can easily charge % fee on cash and bitcoin..

Why risky?

it all depends on what type of exchange you are working with

if you are simply a facilitator then that could happen, but if you are a broker that would be unwise and very risky

for the facilitator they are simply bringing the two sides together to do a transaction, where as the broker is actually responsible for the transfer at some point

I didnt know most of people trade for more coins.. I thought they really just try to trade and then cash out.. Anyway, I am concerned about people who buy and keep... I think that could be a nice way to reduce volatility and still being a 'solution' while we dont have decentralised exchanges..

JS, I dont think this trade is profitable long term... take care

looks like an interesting new concept. ima try it right now 

exchanges already have autotrade features, but some people are not FIAT whores. by this i mean people that get bitcoin purely to cash out to fiat ASAP. instead they want to keep bitcoin, but use the exchanges to profit into more coin. so for example if i was to sell my BTC i do not want to auto trigger a fiat withdrawal and go through AML/KYC crap. i want to put that binary database dollar back onto the order line to buy back into bitcoin.

if i did want to withdraw straight after selling coin, i could press the mouse button 2 times at max to request a withdrawal of fiat.

but both auto withdraw and manual withdraw do not solve the actual problem... banks and exchange owners blocking withdrawals after request is made.

Why do I need them on exchanges? What if I order 'sell at $700'...then later someone go 'buy at $700'. I receive an email or something and just click OK. The trade is complete.



If BitSimple works this way, then we have a really nice solution while we don't have decentralized exchanges

Just because that is the way existing exchanges have done business doesn't mean you need to.

With BitSimple you can sell the coins right from your existing wallet, the trade executes at 0-confirms.  Maybe users should start thinking outside the box and start expecting more from their exchanges?

BitSimple already does that.

Why not just make the withdrawal automatic? When you hit 'buy' they ask 'what adress is the bitcoin going to?' , then you buy and  they send right after that. For people who is selling, first you have the 'deal' - buy and sell same price - then you send the bitcoin.


Is this possible?