In the future, all fiat will be denominated as crypto coins. Then something like Bancor or OpenAnX will be used to convert safely
A decentralized Bitcoin exchange
71–80 of 117 posts
Re: A decentralized Bitcoin exchange
#72Ultra fast trading in millisenconds + real-time updates of all orders are the key requirements for any exchange.
Not sure how a decentralized exhange could manage this.
Re: A decentralized Bitcoin exchange
#73Ultra fast trading in millisenconds + real-time updates of all orders are the key requirements for any exchange. Not sure how a decentralized exhange could manage this.
another vitally important concern in my experience is not being arbitrarily banned without any justification offered, as happened to me with coinbase.
decentralized technology has its own strengths.
Re: A decentralized Bitcoin exchange
#74Ultra fast trading in millisenconds + real-time updates of all orders are the key requirements for any exchange. Not sure how a decentralized exhange could manage this.
In my opinion the frictionless exchange between cryptos and fiat will become important for real world use cases which don't need to be done in milliseconds but rather seconds
Re: A decentralized Bitcoin exchange
#75Earlier quoted context omitted.
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.
I believe the safety is in that you can't frequently issue chargebacks. Once, twice, but eventually the bank starts investigating. It's not a scalable scam.
But often they are using a stolen account, which is the whole reason why the bank is willing to issue the chargeback. If you can steal a lot of accounts, you don't care.
Re: A decentralized Bitcoin exchange
#76Earlier quoted context omitted.
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.
Exactly. The assumption is that would-be fraudsters would neatly obey other rules/norms, such as opening one account tied to one legitimate funding source. Anyone who has run an online business that moves money can tell you that fraudsters are ever-probing for that weak spot and, if it is there, they will find it. There is too much "generally" and "might" in their risk mitigation here, such that their primary line of…
Issuing charge backs too frequently, in fraud attempts, will quickly get you sent to jail, or at the very least permanently banned by the bank.
Re: A decentralized Bitcoin exchange
#77The fundamental problem is that practically all exchanges are credit-based, and decentralized credit doesn't make sense. When you want to purchase bitcoins on an exchange, you start out by depositing e.g. dollars on the exchange, thus converting your dollars to that exchange's dollar token (IOU x USD). You then sell your dollar tokens for bitcoin tokens on the exchange, which is super fast because it centrally contro…
> When you want to purchase bitcoins on an exchange, you start out by depositing e.g. dollars on the exchange, thus converting your dollars to that exchange's dollar token (IOU x USD). You then sell your dollar tokens for bitcoin tokens on the exchange, which is super fast because it centrally controls token ownership, and when you want to get your bitcoins out you sell/redeem your BTC tokens for actual BTC.
Wouldn't that be a perfect problem for a smart contract? It could be used to generate such tethering tokens, hold all real coins (ethereum, here, but if I got it correctly, lightning will implement smart contracts in btc blockchain as well in the future), allow for fast token exchanges and then slower withdrawal from the contract stash. Converting fiat to tokens is still the problem, here, obviously.
Re: A decentralized Bitcoin exchange
#78This is interesting, but I could see some possible issues. It would be fun to ask the Devs some questions. eg: if peers are able to select their arbitrators, how do you prevent a peer and & arbitrator from gaming the system. There is a secondary arbitrator but from the docs it looks like after the initial arbitration the funds are released. Is there a way to protect against root DHT node hijack? Only refernce I see t…
> if peers are able to select their arbitrators, how do you prevent a peer and & arbitrator from gaming the system
Actually, it doesn't even need a criminal association : what if arbitrator is malicious? FAQ answers both our questions : https://bisq.io/faq/#8 and https://bisq.io/faq/#10
The defense mechanism chosen is to make arbitrators pay a high registration fee, so that it would supposedly cost them more to trick the system than they would win (because of the 1btc trade limit). To be noted is that current arbitrators are handpicked by founders, but they want it to be fully decentralized ultimately.
What is not addressed is this : if arbitrator management is fully decentralized, how will people be triggering their safety payment if they do something bad? Will there be some kind of a vote or something? How much time would it takes? (because if it's long enough, malicious arbitrator can steal money from several trades and outperform their safety deposit). It seems like the hardest part to decentralize, and I don't think it's addressed well enough yet.
Re: A decentralized Bitcoin exchange
#79Earlier quoted context omitted.
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.
What bank would allow you 2 chargebacks/week? You'd need 8 bank accounts to reach 1 chargeback/bank/month
Re: A decentralized Bitcoin exchange
#80A better version already exists https://etherdelta.github.io