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Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

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Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#71

Post by petertodd »

patcon wrote: post #3

Not to discredit the very capable developers discussing this, but in the interest for giving credit where credit is due, didn't Peter Todd suggest this back in his Bitcoin 2013 presentation on off-chain transactions? I seem to remember him explaining something similar on a rooftop patio in Toronto last spring after a Bitcoin Toronto meetup. EDIT: http://www.youtube.com/watch?v=4d3LA8KpdMQ#t=6m45s

I'm pretty sure I remember either Gregory Maxwell or Andrew Miller suggesting it to me first, and I think it might be the latter's idea originally. (at least in the Bitcoin space) Andrew has done a lot of work on "merkelizing" data structures: http://www.cs.umd.edu/~amiller/gpads/

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#72

Post by eropple »

pakitan wrote: post #44
splintercell wrote: post #18

Earlier quoted context omitted.

Full Reserve banks don't make loans? Fractional Reserve banks enable you to have your money and be loaned out at the same time(thereby stretching the money supply like an elastic rubber band). Full Reserve banks ONLY loan out money which was specifically deposited to them for the purposes of being able to be loaned out.

You're mistaken if you think full reserve banking somehow doesn't "stretch" the money supply. Let's say I deposit $10K in a "full reserve" bank. The bank then loans it to someone who buys a car. The car dealer goes back to the bank and deposits the proceeds of the sale. Another fella comes in for a loan and the bank gives him dealer's $10K. He then goes to buy a car. Now there are 2 cars bought with "my" $10K. And th…

What you get is interest fit allowing your part of their reserve to be used for loans. It's why certificates of deposit have a higher interest rate at /r/ActualMoney banks.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#73

Post by nullc »

vbuterin wrote: post #69
nullc wrote: post #67

Earlier quoted context omitted.

> > And you still don't fix the problem that balances which are unchecked can be diverted. > Okay, I'll admit I might be missing something here; what do you mean by that? Say Alice _never_ logs in anymore and the site has noticed this. The site can just go "oh Alice, her balance in now 0" and go and gamble away those coins— sure, their holdings go down, but so do their obligations. Since Alice never logs in anyone, s…

Ah okay, that makes sense. You're completely right that that's not really solvable in general. Unless, of course, we finally switch over to a public/private key based login system and each user's balance sheet is composed of a set of authorized/signed deposits, trades and withdrawals (ie. a full blockchain, but centralized and "mined" only by the exchange's server). I wonder what possibilities that kind of setup woul…

Go read that IRC log. :)

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#74

Post by pmorici »

jnbiche wrote: post #57
pmorici wrote: post #48

Earlier quoted context omitted.

I don't disagree my reservation is more about having to do an international wire transfer to get money in and out of Bitstmap. Also since they are outside of the US you are going to have to submit FBAR paperwork to the US government if your account with them ever gets over 10k at any time during the year. In the unlikely chance something did go wrong legal remedies would be more difficult since they are outside the U…

Ah, ok. So it's more because they're outside of the U.S. (your jurisdiction). That makes reasonable. I thought the "locale" comment was about Slovenia, a country that not many people are informed about and unfairly associate with former Eastern Block crime syndicates. And yes, the international wire fees do add up. Do any U.S. exchanges currency offer ACH?

Coinbase is ACH, CampBX took personal Checks up until 3 weeks ago. My primary bank offers wires within the US but not internationally. Doing wires is just a headache you typically have to call the bank on the phone and it just doesn't give me a confident feeling in general.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#75

Post by gnaritas »

nwh wrote: post #70
gnaritas wrote: post #68

Earlier quoted context omitted.

Exchanges don't trade on the blockchain, only deposits and withdrawls are on chain. Off chain transactions make up the bulk of transactions as the blockchain can currenly only handle around 7 transactions a second which is about twice as much as it's actually being pushed so there's still room to breath. The same applies to overstock, coinbase is doing their transaction processing and it's likely most of those are of…

I don't think we are anywhere near the blocks being half full, lots are less than 100kB except for Eligius. Is there anywhere displaying this metric?

I wasn't trying to put a hard number on it; I said about half because that's the number I keep hearing repeated when discussions occur.

https://blockchain.info/charts/n-transactions-per-block

Lots of other interesting charts there. In any case, it doesn't really matter as to the main point that exchanges don't do on block trading, the volume would be far too great for what the network can handle.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#76

Post by Himself »

kumarski wrote: post #13

What bitcoin exchanges do HN readers trust? I've been using http://coinmkt.com I regrettably used MtGox.com. I'm kicking myself now.

I've used coinmkt more and more in the past week. I like them, seem to still be working things out, but if you trade multiple currencies they're a good bet. Being based in the USA doesn't hurt either.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#77

Post by Sambdala »

Sambdala wrote: post #55

If anyone is interesting in helping, I'm going to spend my evening trying to implement this here: https://github.com/ConceptPending/proveit My email is in my profile, and I'm happy to Skype chat with anyone who wants to help.

The basic implementation is now complete.

I'll flesh it out a bit better tomorrow.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#78

Post by M4v3R »

wmf wrote: post #33
M4v3R wrote: post #26

Or, just use a system like we use on Bitalo, where fractional reserves are impossible because of use of multi-signature Bitcoin addresses, which means funds are specifically tied to user wallets and exchange operators cannot use them without user's signing all transactions by himself.

It's not clear that day traders are willing to pay the fees to put their transactions on the blockchain.

They are paying much higher fees for trading on "normal" exchanges. Transaction fee is only 0.0001 BTC, normally you pay WAY more for trading on Mt. Gox/Bitstamp.

Re: Gmaxwell's “prove how (non)-fractional your Bitcoin reserves are” scheme

#79

Post by chris_wot »

mjn wrote: post #14
sillysaurus2 wrote: post #2

The developer is Gregory Maxwell, aka nullc. Here's a very interesting thread in which he proposes that the bitcoin community should demand that every bitcoin exchange (and every other type of service which can hold bitcoin on your behalf, like webwallets) continually prove that they are not fractional reserve. In other words, proof that if every user of the service simultaneously tries to withdraw all of their bitco…

> The developer is Gregory Maxwell, aka nullc. This guy seems to be everywhere! He's a prolific Wikipedia contributor (administrator + many thousands of edits), and was also the guy behind the dump of a ton of pre-1923 JSTOR documents to the Pirate Bay, which in part helped pressure JSTOR to un-paywall its old/PD articles ( http://arstechnica.com/tech-policy/2011/07/swartz-supporter-... ).

The guy was amazing on Wikipedia.
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