A decentralized Bitcoin exchange

Post by notahacker » Tue, Jul 18, 2017, 11:12 AM UTC

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.

Post by gcb0 » Tue, Jul 18, 2017, 11:22 AM UTC

thinkloop wrote: post #60

patio11 wrote: post #41

Earlier 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.

Post by Sleeep » Tue, Jul 18, 2017, 11:33 AM UTC

tudorconstantin wrote: post #79

kbenson wrote: post #45

Earlier quoted context omitted.

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

Post by giergirey » Tue, Jul 18, 2017, 12:05 PM UTC

oelmekki wrote: post #77

runeks wrote: post #67

The 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…

Post by zdkl » Tue, Jul 18, 2017, 12:19 PM UTC

giergirey wrote: post #87

oelmekki wrote: post #77

Earlier quoted context omitted.

> 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…

Yes, I also think exchanging tokens is one of the (few?) situations where a smart contract really is a great solution to a real world problem (as opposed to blockchain hype). Definitely an interesting area, I've been watching this space, here's some interesting ones: On the tethered tokens side, https://decentralizedcapital.com seem to be offering tethered tokens backed by real currencies (and cryptocurrencies on oth…