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A decentralized Bitcoin exchange

github.com

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Re: A decentralized Bitcoin exchange

#41

Post by patio11 »

julian_1 wrote: post #38
olegkikin wrote: post #26

This will not work, because regular bank wire transfers and cash deposits have been reversed in the past, the sender simply claimed hacked account or fraud. Examples: https://medium.com/@TheAlexGalaxy/why-i-m-suing-td-canada-tr... https://www.reddit.com/r/PersonalFinanceCanada/comments/6guh... https://www.reddit.com/r/Bitcoin/comments/1zruvf/warning_cas... https://www.reddit.com/r/Bitcoin/comments/1sglge/the_bank_ar.…

I found their proposed mechanism for handling settlement finality, outlined in their faq, https://bitsquare.io/faq/ . The escrow for bitcoin is a 2 of 3 multi-party contract. What happens if the person buying bitcoin does a chargeback on their national currency after the bitcoin has been released from the multisig escrow? We only support payment methods in which chargebacks are not easy (i.e. we don’t support Paypal)…

There is a trade limit of one bitcoin, which is generally too small to attract criminals (though this limit may be lifted in the future).

I feel like technologists consistently overestimate where the lower bound is for size of an opportunity which causes it to attract adversarial attention, given an adversary who understands e.g. specialization of labor or, more prosaically, how for loops work.

Re: A decentralized Bitcoin exchange

#43

Post by gragas »

julian_1 wrote: post #42
gragas wrote: post #35

This is going to get so destroyed but HFT strategies. A million already come to mind.

How so? HFT generally provides liquidity and is arguably a good thing, for people wanting to execute infrequent trades, on otherwise thin volume markets.

Not saying all firms do this, but I immediately thought of malicious tactics like spoofing.

Re: A decentralized Bitcoin exchange

#44

Post by Abbigail- »

gfody wrote: post #32
olegkikin wrote: post #26

This will not work, because regular bank wire transfers and cash deposits have been reversed in the past, the sender simply claimed hacked account or fraud. Examples: https://medium.com/@TheAlexGalaxy/why-i-m-suing-td-canada-tr... https://www.reddit.com/r/PersonalFinanceCanada/comments/6guh... https://www.reddit.com/r/Bitcoin/comments/1zruvf/warning_cas... https://www.reddit.com/r/Bitcoin/comments/1sglge/the_bank_ar.…

still not a bad alternative to localbitcoins.com, you could arrange to exchange cash in person or mail money orders around which could still be cancelled if the escrow fails.

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Re: A decentralized Bitcoin exchange

#45

Post by kbenson »

patio11 wrote: post #41
julian_1 wrote: post #38

Earlier quoted context omitted.

I found their proposed mechanism for handling settlement finality, outlined in their faq, https://bitsquare.io/faq/ . The escrow for bitcoin is a 2 of 3 multi-party contract. What happens if the person buying bitcoin does a chargeback on their national currency after the bitcoin has been released from the multisig escrow? We only support payment methods in which chargebacks are not easy (i.e. we don’t support Paypal)…

There is a trade limit of one bitcoin, which is generally too small to attract criminals (though this limit may be lifted in the future). I feel like technologists consistently overestimate where the lower bound is for size of an opportunity which causes it to attract adversarial attention, given an adversary who understands e.g. specialization of labor or, more prosaically, how for loops work.

Indeed. One bitcoin was over $3k about 5 weeks ago, and is still over $2k today. Scam someone for half a bitcoin twice a week and that's over $100k a year at current value.

Re: A decentralized Bitcoin exchange

#46

Post by dharma1 »

patio11 wrote: post #30
dharma1 wrote: post #25

Coould you have a decentralised p2p fiat ETH exchange with a smart contract and PayPal, where the sold ETH is being held on the smart contract until PayPal transfer from buyer to seller is verified by the smart contract? Like localbitcoin but no need to meet up

Paypal will never cooperate this, because the service is selling money laundering. Without Paypal's cooperation, you can't guarantee that a transaction presently honored by Paypal will not be reversed in the future, for reasons including "the buyer, who legitimately controlled the Paypal account at time of transaction, decided to defraud the seller" and "the buyer, who has credentials for X,000 Paypal accounts obtain…

If the traffic to PayPal confirming the transaction wasn't from a centralised server, PayPal would have no way of differentiating between an ETH sale or any other transaction, so their cooperation might not be needed.

Reversal - might be better solutions but couldn't the smart contract escrow simply have a timer built in that would allow the fiat receiver to move the money out of his PayPal account, thus preventing reversal?

I'm just running with a half-baked idea, but it feels like it could work. Doesn't need to be PayPal, could be any fiat transaction provider that has an API that allows confirmation of the fiat transfer that the smart contract can access

Re: A decentralized Bitcoin exchange

#47

Post by EpicEng »

echan00 wrote: post #22
cocktailpeanuts wrote: post #3

Just finished watching their video and got nothing other than "Read our white paper if you're interested", plus bunch of buzzwords. Why make the video at all? If I were them I would scrap all the bullshit and just spend the two minutes in the video explaining the basics of WHY and HOW it works. People visiting that site already know what a "decentralized bitcoin exchange" is.

While I know nothing about this project or the creators, I find your comment very ignorant. If you don't like it, go do something else of your own. At least the creators spent time and effort doing something they find valuable. That's 100x better than your comment.

I'm not sure I understand your position. "ignorance" and criticism are two different things. I'm assuming you missed the word here.

Secondly, do you feel there's no room for criticism just because something is provided for free? To me, the grandparents criticism is valid. Maybe it doesn't tell the whole story, I don't know, but it's a concern that deserves an answer. Any reasonable maintainer would welcome valif criticism; this is the process we use to make improvements. This is how software works in general (build something, show consumers, gather feedback, iterate) and literally how all of science works (peer review.)

Again, I don't understand your comment at all. I find your last sentence ironic in that your comment provides exactly zero value to a reader of this thread.

Re: A decentralized Bitcoin exchange

#48

Post by contingencies »

Fiat transfer systems are typically unreliable. They can be intercepted, halted, delayed, reversed, and generally cannot be considered objectively predictable, with a wide variety of unique and nontrivial failure modes - not all of which are recoverable - and no objective SLA / service description.

The problem with assuming good faith and using actor reputation (even third-party arbitrated) is that, in becoming a trusted actor, the amount of money available for cut-and-run scenarios increases exponentially (both for arbitrator and actor), until it ultimately makes sense and happens (eg. numerous scam darknet markets, etc.)... often the claim is "sorry we got hacked!"

Using real world user identities as insurance has the issue that using one's fiat bank account to perform automated or semi-automated trades on behalf of others is probably dubious to against terms of service, or at a minimum vaguely arguably so when politically expedient. Therefore, revealing the real world user identity of an accused bad actor (ie. fiat account holder) as an insurance against bad behavior is likely to expose them to an undue scale of legal hassle and/or asset seizure, which is not something wise to trust a third party with no matter how trustworthy the arbitrators are supposed to be.

My gut feeling is that such systems work only at small scale, with a veneer of trust that can be established in different ways: deposit is placed with counterparty, reputation within some shared community, mafia boss will murder you if you rip off the system, etc. Between absolute strangers, it is exceptionally difficult to reliably scale, even if you can establish it.

Finally, an important point is that frequent <1BTC transfer activity to random destinations on conventional fiat accounts are likely to trigger bank anti money laundering (AML) heuristics.

Re: A decentralized Bitcoin exchange

#49

Post by Abigail45 »

gfody wrote: post #32
olegkikin wrote: post #26

This will not work, because regular bank wire transfers and cash deposits have been reversed in the past, the sender simply claimed hacked account or fraud. Examples: https://medium.com/@TheAlexGalaxy/why-i-m-suing-td-canada-tr... https://www.reddit.com/r/PersonalFinanceCanada/comments/6guh... https://www.reddit.com/r/Bitcoin/comments/1zruvf/warning_cas... https://www.reddit.com/r/Bitcoin/comments/1sglge/the_bank_ar.…

still not a bad alternative to localbitcoins.com, you could arrange to exchange cash in person or mail money orders around which could still be cancelled if the escrow fails.

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Re: A decentralized Bitcoin exchange

#50

Post by atomical »

SeoxyS wrote: post #23
nosuchthing wrote: post #21

Earlier quoted context omitted.

Are there currently any ERC tokens with applicable utility other than wild speculation and claims about unproven future features which the ERC20 tokens are created in completely arbitrary (artificial scarcity, sidestepping SEC IPO investments) limited amounts for?

Numeraire for example (NMR) is a ERC-20 token which has a real-world application today.

You can say that about 99% of the ICO's. That doesn't make them good investments.
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