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Title: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 04:25:50 AM Due to the recent events with both Dwolla and the $75 million lawsuit against Mtgox, it seems increasingly clear that a centralized exchange system is both a significant point of weakness and a heaven for manipulation. I'd curious if anyone in this community has invested a significant amount of time in attempting to develop a P2P exchange. Has anyone written a write paper? Did you come up with an idea but couldn't get funded?
I am considering funding some new ventures in the Bitcoin community after the Summer and if there is a working P2P exchange on the table, then it would be high on my list. Let's start a discussion. Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 04:26:44 AM There's been quite a few posts about this. There's a few projects under way iirc.
Also ripple kind of accomplishes this (though I sure as hell can't figure out how to exchange btc <-> USD on it. Title: Re: Interest in a P2P Exchange Post by: justusranvier on May 15, 2013, 04:28:40 AM There's nothing that prevents everyone on this site from placing advertisements on localbitcoins.com.
It doesn't completely solve the problem, but it would help. Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 04:29:57 AM Yeah localbitcoins transactions can even been done fully online, including escrow. I've been using them for a while now feel free to check out my profile if anybody needs coins:
https://localbitcoins.com/accounts/profile/joesmoe/ Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 04:32:23 AM I'm talking about a secure protocol that is P2P and totally decentralized. I understand Ripple accomplishes this but it is controlled by a single entity and regulatable
Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 04:33:48 AM Unfortunately I don't understand how ripple accomplishes this, it requires a network of friends to develop a trust relationship, so for those who have never used it before and don't have friends that use it, its worthless?
Or am I just missing something. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 04:39:43 AM I'm actually greatly confused myself, which is why I've been trying to get David to do a lecture on Ripple for my course.
Title: Re: Interest in a P2P Exchange Post by: yrashk on May 15, 2013, 04:40:10 AM We at Bex.io are working on achieving a variation of this objective. Even though we are starting with individual exchanges running on our platform, we will be enabling cross-exchange order filling, effectively enabling a global liquidity pool. It is not strictly a P2P exchange, rather a backbone that allows trustworthy representation of non-digital assets.
It will be interesting to see future developments in the exchange space. Title: Re: Interest in a P2P Exchange Post by: cypherdoc on May 15, 2013, 04:40:21 AM Unfortunately I don't understand how ripple accomplishes this, it requires a network of friends to develop a trust relationship, so for those who have never used it before and don't have friends that use it, its worthless? Or am I just missing something. you're not the only one. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 04:46:10 AM http://translate.google.com/translate?sl=sv&tl=en&js=n&prev=_t&hl=sv&ie=UTF-8&eotf=1&u=http%3A%2F%2Fnyheternasverige.se%2Fforsokte-ha-sex-med-getingbo-avled%2F
At least Ripple makes more sense than this :) Title: Re: Interest in a P2P Exchange Post by: justusranvier on May 15, 2013, 04:56:43 AM Order book functionality and front end websites are trivially implemented.
The problem is and always be: how do you handle the movement of non-bitcoin currencies? That is not a problem that can be solved with software. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 04:58:44 AM Quote Order book functionality and front end websites are trivially implemented. The problem is and always be: how do you handle the movement of non-bitcoin currencies? That is not a problem that can be solved with software. That's what I'm getting at. It seems to be the missing link in the entire puzzle Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 05:01:33 AM Order book functionality and front end websites are trivially implemented. The problem is and always be: how do you handle the movement of non-bitcoin currencies? That is not a problem that can be solved with software. Agreed. I really like the localbitcoins approach to it, though it is centralized. It does allow for a variety of different payment methods and even full anonymity. I think another important aspect of localbitcoins.com is that you are able to make relationships with people who use bitcoins. That way even if the site ceased to exist any longer, I would still be getting e-mails for more coins. Once these small webs starts to weave themselves, sooner one won't have to ask too many friends before someone knows where to buy bitcoins from (even without a website). Developing that web initially is what's crucial. I don't see why we can't use something like retroshare to interact and make posts such as is done on localbitcoins (so that we wouldn't have the centralization of a website). BTW retroshare is horrible at what it does, but I love the concept. If you'd like to check retroshare out, shoot me a PM and i'll add ya, there's a bunch of BS bitcoin stuff going on on there right now, but nothing worthwhile. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 05:04:22 AM Anyone interested on doing a lecture on P2P Exchanges?
Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 05:05:21 AM Anyone interested on doing a lecture on P2P Exchanges? I don't think I know enough about them or I would. That may be something better for a discussion with a few panelists or something. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 05:07:25 AM Quote I don't think I know enough about them or I would. That may be something better for a discussion with a few panelists or something. Over the Summer, I'm going to be doing a huge amount of reading and coding for my course: https://www.udemy.com/bitcoin-or-how-i-learned-to-stop-worrying-and-love-crypto/ I'm also going to be writing a proto-bitcoin for an upcoming course on how to develop an Alt coin. I'd love to include exchange tech in my course somewhere especially what's needed for a P2P exchange. Title: Re: Interest in a P2P Exchange Post by: justusranvier on May 15, 2013, 05:10:37 AM The only solution I can see is to have a large number of participants.
In a rational world, it would be easier and more efficient for one person to move $1 million in a single transaction than it would be for 1000 people to each move $1000 in separate P2P transactions, but we don't live in a rational and free world. I think that Ripple can be used effectively as an accounting system that ties everything together, but the key is having lots of people willing to do the work of operating businesses. Title: Re: Interest in a P2P Exchange Post by: solex on May 15, 2013, 05:32:02 AM There's been quite a few posts about this. There's a few projects under way iirc. Yes. Indeed. charles, there are several threads on this idea. Which is a great idea! How about the OPs of these threads crowd-source some plan/project/solution https://bitcointalk.org/index.php?topic=172705.0 Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 15, 2013, 05:44:51 AM Quote Yes. Indeed. charles, there are several threads on this idea. Which is a great idea! How about the OPs of these threads crowd-source some plan/project/solution https://bitcointalk.org/index.php?topic=172705.0 Thank you for this Title: Re: Interest in a P2P Exchange Post by: toffoo on May 15, 2013, 06:06:07 AM There was this: https://bitcointalk.org/index.php?topic=27055.0
After thinking about this topic for some time, here's my 2 cents of free advice for anyone thinking of tackling this project: Make a P2P Alt-coins exchange vs. Bitcoin, with no fiat currencies. The trouble with getting a P2P exchange working well is handling the exchange of the fiat (and also all the regulation/fraud prevention that comes with it). By simply trading crypto vs. crypto you avoid a lot of the headaches that have prevented a working P2P exchange from happening. Get the software up and working good and then maybe sometime later someone comes up with a good escrowed or 3rd-party managed way to swap the fiats so you can expand into trading crypto vs. legacy currencies. Title: Re: Interest in a P2P Exchange Post by: joesmoe2012 on May 15, 2013, 06:58:36 AM I don't see how an Alt-coins exchange would help. The problem isn't getting BTC in particular, its getting ALT-coins in general.
Title: Re: Interest in a P2P Exchange Post by: toffoo on May 15, 2013, 07:48:31 AM Well, I suggest the idea because it would be so much easier and more feasible to do than a distributed BTC vs. fiat exchange.
There is already a well established market for trading BTC vs. Altcoins (centralized of course, at BTC-e and a few others) so this would be an excellent proof-of-concept that a distributed P2P exchange can work and thrive. I can envision some clever developer coming up with an open-source distributed exchange client that could perhaps cryptographically escrow your BTC and LTC holdings, maintain a distributed order book, and then instantly swap the BTC for LTC when a trade has been agreed, without counterparty or clearing risk. Something like that would probably catch on. Title: Re: Interest in a P2P Exchange Post by: bitbitcoins on May 15, 2013, 08:25:27 AM look at i2p technology perhaps ?
Title: Re: Interest in a P2P Exchange Post by: Bitcoiner_cph on May 15, 2013, 09:15:47 AM I have been giving this topic some serious thoughts. I have some general ideas about how to solve the problem with making a p2p exchange.
My ideas are not that concrete yet, but maybe they den be more clear if I share my thought here and we develop ideas here. It should be fairly easy to make the bitcoin par of the p2p exchange, the hard part is moving the fiat. 1. One way to move the fiat is by letting people transfer to each others bank accounts, "anonymously" or covered by another "word in the messages to the bank, maybe an code". Okay this should also be easy to make. But it would be very easy for people to abuse the system, take the BTC and never do the wire, right? So the p2p network have to include a WOT function, then the network could be build slowly with smaller transactions between people that have some real life trust, and when the WOT develop, more and more people could enter - and the p2p would expand. I think this kind of p2p exchange would require a system where new people are introduced by trusted people in the network, and only with smaller amounts until they build their trust WOT. The WOT had to be managed though a new protocol that is included in the p2pexhcnage, I cannot see how this should be done in practice at the moment. Will this idea work? 2. Making a peer to peer protocol that serve al transactions, but make smaller centralized privately owned clearing houses, that make the actual fiat transactions in one or several countries. These would be small, un maybe undercover/semi-anonymous (?), and there would have to be a WOT rating system for these smaller clearing houses?.. they have to operate in a way so they can be opened and closed fast, in order to keep regulators away. 3. Drop all official exchanges of bitcoins and just make a pricing system, that people that trade in person via OTC and bitcoin-otc could use to report trades?? 4. Make an exchange that uses NASH EQUILIBRIUM AND MUTUAL ASSURED DESTRUCTION. It can be made via TOR and therefore anonymous, it hold the future of bitcoin exchange IN MY BELEIVE!!! ( I am a programmer and I can make this exchange 100%... I need designer and a TOR hosting expert!!! (write me a PM). http://www.libertariannews.org/2013/05/03/using-the-nash-equilibrium-and-mutually-assured-destruction-to-by-pass-currency-exchanges/ Title: Re: Interest in a P2P Exchange Post by: BlueNote on May 18, 2013, 06:42:00 PM 4. Make an exchange that uses NASH EQUILIBRIUM AND MUTUAL ASSURED DESTRUCTION. It can be made via TOR and therefore anonymous, it hold the future of bitcoin exchange IN MY BELEIVE!!! ( I am a programmer and I can make this exchange 100%... I need designer and a TOR hosting expert!!! (write me a PM). http://www.libertariannews.org/2013/05/03/using-the-nash-equilibrium-and-mutually-assured-destruction-to-by-pass-currency-exchanges/ That sounds crazy and drastic to me. Both people "destroying" a good amount of value in BTC over a simple trade? How is that an improvement on escrow? An arbitration/escrow service or WoT (web of trust) can facilitate trade without having to cause both people to lose and send their bitcoins into a black hole. There are real issues that may come up in a trade where both people may have valid grievances against the other. This "solution" has them dumping twice the value of the trade down the tubes. And then what - they walk away seething with anger and never trade again? "Mutually assured destruction" has to do with psychopathic governments exchanging nukes with each other. Trading is supposed to be the opposite of that; it's supposed to be civilized. Why would anyone risk 20 BTC to trade 10 when they could just pay a small fee to an escrow service? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 18, 2013, 07:54:18 PM Because you have to trust somebody
Title: Re: Interest in a P2P Exchange Post by: bytemaster on May 18, 2013, 08:19:39 PM Because with an escrow service you have to trust a 3rd party AND if there is a conflict then that 3rd party has to judge the impossible: 'was it damaged before, durring, or after shipping?'. What were the original promises? Etc.
With NashX both parties have a powerful incentive to work things out. Take child support disputes... it is often better to settle and pay 'more' or 'less' than you think is fair than to fight it in court. The high risk, the amount you lose in legal fees is greater than the amount you hope to gain, etc. NashX eliminates the need for a 3rd party arbitrator. There is only one downside to NashX's approach... it can be a game of chicken and someone who is 'crazy' can win concessions in their favor. My ex-wife does this to me all of the time. We both 'lose' by going to court and we both 'gain' by staying out of court. If we simply 'split' things then we would each see $2000 savings by avoiding court. But she decides she would rather loose that $2000 than see me gain $2000 and therefore demands the 'savings' be split $3000/$1000 in her favor or else we go to court and we are both out $2000. So if you are 'crazy' you enter into a deal with someone and lock up 40 BTC... then they send you 10 BTC payment and you 'default' and don't send them the goods worth 10 BTC. You then tell them that they can settle the dispute and get their 20 BTC back for a net loss of 10 BTC or they can lose 30 BTC. Given the choice between losing 10 and losing 30 it is only 'rational' to lose 30 *if* you expect to gain something for that 20 BTC. If the money goes into a 'black hole', the only thing you gain is 'punishment' of the bad guy. This only works if most people agree to punish the bad guy AND the bad guy wants to repeat the scam, but this is a prisoners delimia because everyone has incentive to 'defect' and take the 10 BTC loss instead of 30 BTC loss even though everyone is better off cooperating because it would eliminate the fraud in the first place. As a 'crazy bad guy' you decide to play this scam on 10 people. If 30% of the time people destroy the funds, and the other 70% they agree to settle... then you net 70 BTC from those you scammed and lost 60 BTC from those who opt for mutually ensured destruction causing your whole scam to net 10 BTC. Therefore the amount that individuals are required to risk depends upon the average 'defect' rate in the prisoners delimia of accepting a 10 or 30btc loss for the benefit of others. Title: Re: Interest in a P2P Exchange Post by: BlueNote on May 18, 2013, 09:21:30 PM I would rather build a network of people who are accountable to each other. I think the promise of P2P exchange (not just buying and selling bitcoin) is that you can build a functioning society that parallels the real world. I don't see why you can't have trusted individuals/institutions and a working legal system in the digital realm if you have the right design.
The quest for total anonymity doesn't strike me as realistic. It makes sense for some things, but I don't think it makes sense overall in a system of exchange. A strong network of people engaged in free trade is more interesting to me than total anonymity. Trust is not a big deal if you have the right rules and mechanisms in place to govern people's behavior. Going for total anonymity takes you a different direction where you lose so much of what makes society functional and interesting. I can see some anonymous elements in a P2P network, but I can't see it as a paradigm for the whole system of exchange. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 18, 2013, 09:55:59 PM Do we want paypal or do we want cash?
Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 06:20:15 AM Quote Order book functionality and front end websites are trivially implemented. The problem is and always be: how do you handle the movement of non-bitcoin currencies? That is not a problem that can be solved with software. That's what I'm getting at. It seems to be the missing link in the entire puzzle I agree. The below is a post I made on reddit two weeks ago. It didn't get much traction but I still think it might be an important idea. (EDIT: not sure if my idea here is any big improvement over ideas already mentioned, but maybe still worth a bit of attention, so I'll leave it here). http://www.reddit.com/r/Bitcoin/comments/1doeih/idea_for_solving_the_exchange_problem_just_add/ (text for lazy): Consider: A set S of people possessing USD bank accounts AND BTC balances. They also should have internet banking to make things a lot easier. They all run peer to peer software P. A new user X wants to exchange USD for BTC. She downloads and runs P. P selects a member of S (according to some simple criteria e.g. their current BTC balance, and that they haven't transacted recently, etc.). Member S1 is chosen and instructed to put $Y equivalent into escrow in BTC. Exchange rate set by some reference rate has to be agreed by both parties before continuing. When X sees that $Y equivalent is in escrow, she wires $Y in USD to S1's account as instructed by software. Note that this is an individual-individual wire transfer and so is less likely to get flagged than a transfer to a known BTC exchange. The beauty of this approach is that we can obfuscate further by having the software create multiple transfer paths. E.g. Buyer X sends wire to S2 who then wires to S1. 2 of 3 escrow for both steps. Process takes longer (not necessarily a long time in one country, though, in some places it's very quick) but after all we're talking about just initial funding of BTC. Also, creating multiple steps is a hassle and is probably not needed. A small economic incentive for being an intermediary (members of S) is highly desirable, for obvious reasons. But don't make it too high since the process only has value by being distributed. Advantages of this approach should be obvious - no centralising of the absolutely critical point of failure in the current system: fiat into BTC. No need for in person contact and no paper/info trail (use encryption) except occasional wire transfers which have no pattern that the regulators could identify. No need for a centralised trading house exposed to DDOS and just general system failure. And even if you want to put 20K USD into BTC you can do it 1K at a time, always wiring to a different person. It works because it combines the power of decentralisation with the type of transaction that the government cannot possibly regulate away: individual people will always be allowed to give each other small amounts of money or the entire society would collapse! Finally about escrow: m of n type escrow could be implemented again using the peer to peer software - e.g. a number of escrow third parties (to hold the locked addresses) could be set up and chosen at random, again they would be given a small economic incentive do so, note that they would never have even the ability to take your money in this architecture, they could only destroy it, for which they have zero incentive. Actually I am not very knowledgeable about these bitcoin escrow processes but I know they have been used already. Title: Re: Interest in a P2P Exchange Post by: QuantumQrack on May 19, 2013, 07:00:38 AM Quote Order book functionality and front end websites are trivially implemented. The problem is and always be: how do you handle the movement of non-bitcoin currencies? That is not a problem that can be solved with software. That's what I'm getting at. It seems to be the missing link in the entire puzzle I agree. The below is a post I made on reddit two weeks ago. It didn't get much traction but I still think it might be an important idea. (EDIT: not sure if my idea here is any big improvement over ideas already mentioned, but maybe still worth a bit of attention, so I'll leave it here). http://www.reddit.com/r/Bitcoin/comments/1doeih/idea_for_solving_the_exchange_problem_just_add/ (text for lazy): Consider: A set S of people possessing USD bank accounts AND BTC balances. They also should have internet banking to make things a lot easier. They all run peer to peer software P. A new user X wants to exchange USD for BTC. She downloads and runs P. P selects a member of S (according to some simple criteria e.g. their current BTC balance, and that they haven't transacted recently, etc.). Member S1 is chosen and instructed to put $Y equivalent into escrow in BTC. Exchange rate set by some reference rate has to be agreed by both parties before continuing. When X sees that $Y equivalent is in escrow, she wires $Y in USD to S1's account as instructed by software. Note that this is an individual-individual wire transfer and so is less likely to get flagged than a transfer to a known BTC exchange. The beauty of this approach is that we can obfuscate further by having the software create multiple transfer paths. E.g. Buyer X sends wire to S2 who then wires to S1. 2 of 3 escrow for both steps. Process takes longer (not necessarily a long time in one country, though, in some places it's very quick) but after all we're talking about just initial funding of BTC. Also, creating multiple steps is a hassle and is probably not needed. A small economic incentive for being an intermediary (members of S) is highly desirable, for obvious reasons. But don't make it too high since the process only has value by being distributed. Advantages of this approach should be obvious - no centralising of the absolutely critical point of failure in the current system: fiat into BTC. No need for in person contact and no paper/info trail (use encryption) except occasional wire transfers which have no pattern that the regulators could identify. No need for a centralised trading house exposed to DDOS and just general system failure. And even if you want to put 20K USD into BTC you can do it 1K at a time, always wiring to a different person. It works because it combines the power of decentralisation with the type of transaction that the government cannot possibly regulate away: individual people will always be allowed to give each other small amounts of money or the entire society would collapse! Finally about escrow: m of n type escrow could be implemented again using the peer to peer software - e.g. a number of escrow third parties (to hold the locked addresses) could be set up and chosen at random, again they would be given a small economic incentive do so, note that they would never have even the ability to take your money in this architecture, they could only destroy it, for which they have zero incentive. Actually I am not very knowledgeable about these bitcoin escrow processes but I know they have been used already. I like it.. a lot. Can somebody code this please? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 19, 2013, 07:15:31 AM Now this thread is cooking. Keep it coming ya'll
Title: Re: Interest in a P2P Exchange Post by: solex on May 19, 2013, 07:27:38 AM Now this thread is cooking. Keep it coming ya'll Agreed. Waxwing is describing an ideal high-level solution. Title: Re: Interest in a P2P Exchange Post by: BTCLuke on May 19, 2013, 08:11:23 AM I agree. The below is a post I made on reddit two weeks ago. It didn't get much traction but I still think it might be an important idea. (EDIT: not sure if my idea here is any big improvement over ideas already mentioned, but maybe still worth a bit of attention, so I'll leave it here). This is very similar to what I had in mind as well. I have thought about it quite a lot over the last month and I'm pretty close to cracking this thing, but like everyone else here says, handling fiat is the killer.http://www.reddit.com/r/Bitcoin/comments/1doeih/idea_for_solving_the_exchange_problem_just_add/ (text for lazy)... While your version of the solution gives a basic premise on what to do with the fiat, I don't see a way to replace fiat transfer functionality for anything faster than an OTC service... Clearly this escrowing of the fiat (specifically the funding of the escrow from a bank or paypal account) is not rapid enough for this system to work in real time with 100s of trades a minute like MtGox does. And certainly no pretty real-time graphs of the trades like the MtGox API allows for, if I'm not mistaken. I haven't solved this part yet either, but I've got some very interesting ideas on how the escrow and decentralized order book would work exactly. It's even self-promoting in that just keeping the client open and online will make the owner money automatically without lifting a finger! Sadly, the best idea I've heard so far for a realistic solution to the fiat problem is Bitcoiner_cph' Nash Equilibrium idea above, although that was ironically suggested as an idea for use with bitcoin, not fiat. Bitcoin doesn't ever need such a device... Escrows can be funded very quickly since the value itself moves, and it's all just one movement. Fiat, on the other hand, moves an "IOU" first followed by actual funds through a government-approved system. We have no problem coding an IOU mover, but moving the value outside of the guvmint's wires is quite a challenge. What we really need is someone who has worked with ACH, Wiretransfers, Swift & SEPA systems, and any other banking protocols that truly understands how VALUE is moved between accounts, not just "IOUs." Once we can duplicate the movement of a fiat's value between two peers without a centralized source like a bank in the middle, then we'll be able to hold that value (and therefore the fiat money itself) in online wallets that we trade in real-time with cryptocurrencies. Title: Re: Interest in a P2P Exchange Post by: BTC Books on May 19, 2013, 08:29:28 AM I agree. The below is a post I made on reddit two weeks ago. It didn't get much traction but I still think it might be an important idea. (EDIT: not sure if my idea here is any big improvement over ideas already mentioned, but maybe still worth a bit of attention, so I'll leave it here). http://www.reddit.com/r/Bitcoin/comments/1doeih/idea_for_solving_the_exchange_problem_just_add/ (text for lazy): Consider: A set S of people possessing USD bank accounts AND BTC balances. They also should have internet banking to make things a lot easier. They all run peer to peer software P. A new user X wants to exchange USD for BTC. She downloads and runs P. P selects a member of S (according to some simple criteria e.g. their current BTC balance, and that they haven't transacted recently, etc.). Member S1 is chosen and instructed to put $Y equivalent into escrow in BTC. Exchange rate set by some reference rate has to be agreed by both parties before continuing. When X sees that $Y equivalent is in escrow, she wires $Y in USD to S1's account as instructed by software. Note that this is an individual-individual wire transfer and so is less likely to get flagged than a transfer to a known BTC exchange. The beauty of this approach is that we can obfuscate further by having the software create multiple transfer paths. E.g. Buyer X sends wire to S2 who then wires to S1. 2 of 3 escrow for both steps. Process takes longer (not necessarily a long time in one country, though, in some places it's very quick) but after all we're talking about just initial funding of BTC. Also, creating multiple steps is a hassle and is probably not needed. A small economic incentive for being an intermediary (members of S) is highly desirable, for obvious reasons. But don't make it too high since the process only has value by being distributed. Advantages of this approach should be obvious - no centralising of the absolutely critical point of failure in the current system: fiat into BTC. No need for in person contact and no paper/info trail (use encryption) except occasional wire transfers which have no pattern that the regulators could identify. No need for a centralised trading house exposed to DDOS and just general system failure. And even if you want to put 20K USD into BTC you can do it 1K at a time, always wiring to a different person. It works because it combines the power of decentralisation with the type of transaction that the government cannot possibly regulate away: individual people will always be allowed to give each other small amounts of money or the entire society would collapse! Finally about escrow: m of n type escrow could be implemented again using the peer to peer software - e.g. a number of escrow third parties (to hold the locked addresses) could be set up and chosen at random, again they would be given a small economic incentive do so, note that they would never have even the ability to take your money in this architecture, they could only destroy it, for which they have zero incentive. Actually I am not very knowledgeable about these bitcoin escrow processes but I know they have been used already. This is really quite good. Here's a missing piece: Integrate knowledge of ACH and SEPA into the routing scheme of the (P) client. Use bitcoin transfers to hop between the two when necessary, so that wire transfers are never needed. Then you've got the whole world into the system with no transaction having a base cost of more than a dollar. What individual members of set S choose to charge is up to them, of course. EDIT: I would participate in this, and contribute to a kickstarter-type campaign. Title: Re: Interest in a P2P Exchange Post by: rebuilder on May 19, 2013, 09:27:34 AM Is it yet possible to make split-key wallets? I mean a wallet with a private key derived from keys provided by two or more parties, with each party only knowing their own portion of the key, and the generated private key accessible only to someone knowing all of the input keys? If this can be done, no trusted 3rd party is needed. No possibility for arbitration either, though.
Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 09:47:43 AM Nice to see some good discussion going on this.
While your version of the solution gives a basic premise on what to do with the fiat, I don't see a way to replace fiat transfer functionality for anything faster than an OTC service... Clearly this escrowing of the fiat (specifically the funding of the escrow from a bank or paypal account) is not rapid enough for this system to work in real time with 100s of trades a minute like MtGox does. Quote And certainly no pretty real-time graphs of the trades like the MtGox API allows for, if I'm not mistaken. I hadn't thought about that part at all, but there's no reason why the software can't collect the price data from all the transactions. Clients would probably want to use a reference rate from some external exchange, but they could just as easily use the last price transaction within the P2P network itself, or just agree on their own rate.A couple more ideas: what I was proposing is only different from existing OTC approaches (including localbitcoins) in 2 ways: first, if it works as designed people can do the transactions without leaving their home (I assume others can wire money from internet banking to a not-pre-defined other bank customer, as I can, using my bank's 2 factor authorization process - but doubtless this must vary a lot from bank to bank) and second, the P2P software can have a lot of intelligence in its algorithm to choose a counterparty/counterparties. If it can be made to work, therefore, this approach is much better than localbitcoins. It doesn't have to be wire transfers, but it needs to be something with high irreversibility, realistically. Someone on reddit suggested that SEPA transactions are reversible in a certain time frame (I had thought that they weren't). That would limit the speed of these transactions to that timeframe. Does anyone else have info on reversible wires? As for ACH, I only know it exists, not being American I have no knowledge of the nuances. I'd also emphasize that we should be clear what we're trying to solve. From my perspective, this is not an attempt to create the long term P2P trading structure that might be needed for cryptocurrency based economy in general (as for example Ripple type things are doing now, although I'm in the anti-Ripple camp). This is just about creating a structure to "hack" the banking system such that it's impractical to stop the flow of money into Bitcoins initially. Title: Re: Interest in a P2P Exchange Post by: edmundedgar on May 19, 2013, 09:50:32 AM I don't see how an Alt-coins exchange would help. The problem isn't getting BTC in particular, its getting ALT-coins in general. It's one of two things that would help mitigate the problems. The other is an alt-coin that controls its own money supply to keep its value pegged to a fiat currency - a kind of parallel crypto-dollar. That wouldn't solve the problem, but it would help because: - You'd have functioning price discovery even when the non-p2p exchanges were borked. - You'd be able to speculate and hedge against exchange rate risk between Bitcoins and the equivalent of dollars, in a censorship-resistant, frictionless environment. - People could sell stable crypto-dollars for cash in a lot of environments where they can't sell volatile Bitcoins. For example, a lot of shops near me sell online gaming tokens, but it's hard to see them selling Bitcoins because they'd have to keep changing the prices. These could then be traded for Bitcoins on a p2p exchange. Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 09:55:30 AM Is it yet possible to make split-key wallets? I mean a wallet with a private key derived from keys provided by two or more parties, with each party only knowing their own portion of the key, and the generated private key accessible only to someone knowing all of the input keys? If this can be done, no trusted 3rd party is needed. No possibility for arbitration either, though. I believe that's functionally equivalent to 2 of 2 escrow. Have a look at https://bitcointalk.org/index.php?topic=49370.0 EDIT: I see no reason why we couldn't give the user the choice of 2 of 2 or 2 of 3, with the former being slightly cheaper, but having the risk of your counterparty dying or being irrational enough to destroy their reputation (and receiving nothing) by not paying you. A reputation system could make that risk very small indeed; I could well imagine choosing that option in many scenarios, and yes it would be more convenient. Title: Re: Interest in a P2P Exchange Post by: solex on May 19, 2013, 09:59:11 AM It's one of two things that would help mitigate the problems. The other is an alt-coin that controls its own money supply to keep its value pegged to a fiat currency - a kind of parallel crypto-dollar. That could be Liberty Reserve? Perhaps that is the best quasi-crypto version of the dollar (also a euro version exists, I think). Title: Re: Interest in a P2P Exchange Post by: herzmeister on May 19, 2013, 10:07:39 AM I recently wrote this up. Some ideas are similar, but I want to enable real daytrading with real depth rather than OTC only. BTC escrow also may not be necessary.
1. There is a fiat ledger database. It can be a distributed. It only contains internal bookkeeping information. Much like Ripple. 2. Any exchange website can use this database. Such a website can also run in Tor. 3. I'm new, I want to buy bitcoins, I register and log on to one of those exchange websites. 4. It looks and works like any other exchange. First, I have to deposit some fiat. 5. This website does not manage its own bank account however. 6. Instead, it tells me to wire-transfer the money to one or more random guy bank accounts. 7. After a while, the random guys confirm that they received the fiat funds. 8. I now have my fiat displayed in my exchange account. 9. Everything looks and feels just like MtGox and other exchanges. No OTC crap. I can instantly buy and sell BTC for fiat. It's just local bookkeeping and number juggling for the website after all at this point. 10. I've made some gains (or not) and want to cash out some or all of my fiat. 11. The network picks one or more appropriate candidates who want to deposit fiat to buy bitcoins. 12. From their point of view, the random guy of point 6 is now me. 13. I have to send a confirmation to the network, probably manually, that I've received my funds. 14. Mission accomplished. Remarks: A) The fiat ledger database contains all the necessary bookkeeping, but should keep private information like bank accounts secret. B) However, cheaters could be blacklisted and their bank account details could be published. C) Deposits and withdrawals may take quite a long while depending on current market parameters as there'd essentially be internal waiting lists that would have to be matched. Spectacular price crashes and bubble bursts can have dramatic effects in this regard. Note: There's no one here who receives money to "not return it". Those who receive fiat are those who want to cash out anyway. The only problem here is that there would have to be some confirmation mechanism about that fact. There's no public API for wire transfer data AFAIK to automate that. The receiver could complain they didn't receive any money. If they make that believable to the network, they could theoretically receive money twice. Another problem rather is that those who put money into the system could revoke the transaction later, if their bank allows chargebacks. Here the blacklisting and publishing of their identity could be applied. The network could offer a bounty here, which could be funded by trading fees. Title: Re: Interest in a P2P Exchange Post by: edmundedgar on May 19, 2013, 10:14:16 AM It's one of two things that would help mitigate the problems. The other is an alt-coin that controls its own money supply to keep its value pegged to a fiat currency - a kind of parallel crypto-dollar. That could be Liberty Reserve? Perhaps that is the best quasi-crypto version of the dollar (also a euro version exists, I think). I was thinking we'd have to make a thing like Bitcoin but with a way to find out its own exchange rate and print or destroy money, but maybe Liberty Reserve would be good enough for practical purposes. I guess the minimum you'd need would be: 1) An API allowing transactions to be made in real time, and confirmed by third-parties. (Not sure if they have the latter, but if not maybe they could be persuaded.) 2) Non-reversible payments. Title: Re: Interest in a P2P Exchange Post by: BTC Books on May 19, 2013, 10:26:15 AM Personally, I have no interest in daytrading. There are plenty of forex-type bitcoin exchanges for that - Gox, for example. The issue is making it easy for new people to get bitcoin; and easy for those who want to, to get fiat. Period.
For a P2P system like waxwing describes, I would be absolutely in favor of integrating delays in order matching to eliminate daytrading and HFT bullshit. And I would never participate in anything with even a whiff of Ripple to it. That thing is designed to own all the bitcoin and issue IOUs in the form of XRP, near as I can tell. It's not open source, it's premined, it's completely centralized, and I want no part of it. Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 10:39:39 AM I recently wrote this up. Some ideas are similar, but I want to enable real daytrading with real depth rather than OTC only. BTC escrow also may not be necessary. 1. There is a fiat ledger database. It can be a distributed. It only contains internal bookkeeping information. Much like Ripple. 2. Any exchange website can use this database. Such a website can also run in Tor. 3. I'm new, I want to buy bitcoins, I register and log on to one of those exchange websites. 4. It looks and works like any other exchange. First, I have to deposit some fiat. 5. This website does not manage its own bank account however. 6. Instead, it tells me to wire-transfer the money to one or more random guy bank accounts. 7. After a while, the random guys confirm that they received the fiat funds. 8. I now have my fiat displayed in my exchange account. 9. Everything looks and feels just like MtGox and other exchanges. No OTC crap. I can instantly buy and sell BTC for fiat. It's just local bookkeeping and number juggling for the website after all at this point. 10. I've made some gains (or not) and want to cash out some or all of my fiat. 11. The network picks one or more appropriate candidates who want to deposit fiat to buy bitcoins. 12. From their point of view, the random guy of point 6 is now me. 13. I have to send a confirmation to the network, probably manually, that I've received my funds. 14. Mission accomplished. Remarks: A) The fiat ledger database contains all the necessary bookkeeping, but should keep private information like bank accounts secret. B) However, cheaters could be blacklisted and their bank account details could be published. C) Deposits and withdrawals may take quite a long while depending on current market parameters as there'd essentially be internal waiting lists that would have to be matched. Spectacular price crashes and bubble bursts can have dramatic effects in this regard. Note: There's no one here who receives money to "not return it". Those who receive fiat are those who want to cash out anyway. The only problem here is that there would have to be some confirmation mechanism about that fact. There's no public API for wire transfer data AFAIK to automate that. The receiver could complain they didn't receive any money. If they make that believable to the network, they could theoretically receive money twice. Another problem rather is that those who put money into the system could revoke the transaction later, if their bank allows chargebacks. Here the blacklisting and publishing of their identity could be applied. The network could offer a bounty here, which could be funded by trading fees. If I understand you correctly, the main difference between what you're suggesting and what I'm suggesting is you're looking to have exchanges to create deep order books for liquid trading between BTC and USD held on those exchanges, or more accurately, the USD will be held in a distributed ledger. That would mean you need to perform the same magic as Satoshi did with the blockchain (verifying the ledger), which means proof of work again (to prevent the double spend attack). Isn't that right? Because effectively to take USD off that ledger means a transaction, which means you're having to create a whole crypto again (USDcoin or whatever). Possibly I misunderstood. (I was just looking for a way to let people bring USD into the BTC world, rather than trading back and forth, so I wasn't thinking about a ledger for it, just peer to peer buying/selling). Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 10:46:24 AM This is really quite good. Here's a missing piece: Integrate knowledge of ACH and SEPA into the routing scheme of the (P) client. Use bitcoin transfers to hop between the two when necessary, so that wire transfers are never needed. Then you've got the whole world into the system with no transaction having a base cost of more than a dollar. What individual members of set S choose to charge is up to them, of course. EDIT: I would participate in this, and contribute to a kickstarter-type campaign. Thanks for the support. I would definitely participate too! But I think github is the right place to start a project like this and take it from there. I have coding experience of sorts, but it goes back a decade or more, and even worse I have zero experience of P2P or network programming, so others would have to take a leading role in the implementation. On the other hand, I luckily will have a lot of free time over the next 6 months so I would definitely be in a position to take part. I'm struggling to get your idea, however. How does knowledge of bank transfers inside the software help us to avoid the need for doing the wire transfers? Probably being dense here... EDIT: Just to add, my original thought was to keep the bank transfer process completely out of the core of the software. There could be a mutable layer on top describing the payment with certain data (the amount, the currency etc.), to make it easier for the user, but it would probably be good if the software kept a certain "deniability" of the actual outside world transaction, for security reasons. Title: Re: Interest in a P2P Exchange Post by: herzmeister on May 19, 2013, 11:07:50 AM That would mean you need to perform the same magic as Satoshi did with the blockchain Ripple or colored coins. Title: Re: Interest in a P2P Exchange Post by: waxwing on May 19, 2013, 01:28:50 PM That would mean you need to perform the same magic as Satoshi did with the blockchain Ripple or colored coins. Title: Re: Interest in a P2P Exchange Post by: Peter Lambert on May 19, 2013, 01:42:44 PM Unfortunately I don't understand how ripple accomplishes this, it requires a network of friends to develop a trust relationship, so for those who have never used it before and don't have friends that use it, its worthless? Or am I just missing something. You don't need friends to develop trust lines, you just have to have some sort of business which you can trust. For example, one gateway which many people use is BitStamp. BitStamp only sends out ripple IOUs for bitcoins or USD which they are holding because people deposited those funds at their exchange. So if somebody gives you a BitStampBTC, you know there is an actual bitcoin sitting at BitStamp which you can withdraw if you have an account set up with BitStamp. You could also trade that BitStampBTC for USD without ever having an account with BitStamp. Title: Re: Interest in a P2P Exchange Post by: BTC Books on May 19, 2013, 04:39:59 PM That would mean you need to perform the same magic as Satoshi did with the blockchain Ripple or colored coins. Yes, maybe. You're right about this though: Quote I'm struggling to get your idea, however. How does knowledge of bank transfers inside the software help us to avoid the need for doing the wire transfers? Probably being dense here... Putting bank info into the client software works within the boundaries of a single currency. It was me being dense, not you. It's still very effective and cheap within a currency though - SEPA is 0.9 Euro, and ACH is 25 cents - but not across that barrier. Frankly though, for new users and for general-use convenience, a single-currency P2P system would be Good Enough (TM). Cross currency gets more expensive. Not as bad as a wire transfer for sub-$2k transactions, but still high. No good at all for larger transactions. My thought was having users on a forex exchange (MtGox) to take in bitcoin and currency, and swap them on the exchange. A $1k purchase Euro > USD might cost about $8-9. Cheaper than a wire + exchange fee, but... Title: Re: Interest in a P2P Exchange Post by: Namealreadyexists on May 19, 2013, 05:45:30 PM From a user perspective I am only concerned about fraud. Unlike exchanges that hold both bitcoins and fiat, P2P will require one party to take the risk of the other party defaulting. How exactly is "escrow" going to work without a 3rd party arbiter?
An alternative, described earlier as "mutually assured destruction" is to have both parties put up a deposit equal to the value of the deal, and if either one of them is unhappy they both loose it, so the "bad guy" has nothing to gain. But the "good guy" has twice as much to loose, and that opens the door for another character, the "crazy guy" who just goes arround defaulting to sabotage the system. Oh, and reputation is based on verification, and that's just another 3rd party action. Take a look at hawala, it's based on trust. Trust is based on kinship, or one member voching for another. What we need, is just another social network, for friends with benefits. Title: Re: Interest in a P2P Exchange Post by: waxwing on May 20, 2013, 06:04:35 AM From a user perspective I am only concerned about fraud. If you were only concerned about fraud, and not arbitrary actions by the government to lock accounts, then you would definitely be better off trusting large, centralized exchanges to transfer your USD to BTC, like bitfloor, Mtgox etc. Recent history and, I would say, an understanding of the politics of money, suggests that's not the right position to take.Quote Unlike exchanges that hold both bitcoins and fiat, P2P will require one party to take the risk of the other party defaulting. How exactly is "escrow" going to work without a 3rd party arbiter? An alternative, described earlier as "mutually assured destruction" is to have both parties put up a deposit equal to the value of the deal, and if either one of them is unhappy they both loose it, so the "bad guy" has nothing to gain. But the "good guy" has twice as much to loose, and that opens the door for another character, the "crazy guy" who just goes arround defaulting to sabotage the system. The NashX concept is only a bit different from what has previously been implemented as 2 of 2 escrow (at least that's the name I read). It's technically fairly simple. A sends the BTC into an address which can only be unlocked by A and B (B is the recipient). Take a look at the earlier discussion on this in the thread. 2 of 3 is only marginally more complex, and involves a third party, but the trust in the third party is not the kind of trust you need when storing money on an exchange or a bank account, because the third party can never take the money. Edit: https://en.bitcoin.it/wiki/User:Casascius/Escrow_scheme_draft (https://en.bitcoin.it/wiki/User:Casascius/Escrow_scheme_draft) has a good clear overview of the concept, and take a look at bitescrow.org for an implementation. It's fairly simple. Quote Oh, and reputation is based on verification, and that's just another 3rd party action. Yes and no. You can sign a message with the private key of one of your bitcoin addresses to verify identity. That's the beauty of bitcoin - it actually creates cryptographically very solid identities, but these identities are totally disassociated from government sanctioned identities. Reputation systems can be built on top of this bitcoin identity. I personally am not in favour of overemphasising the reputation aspect in this, though, because it seems that this would tend to a centralization of the money flows, which is really what (I think) we should be trying to avoid. Quote Take a look at hawala, it's based on trust. Trust is based on kinship, or one member voching for another. What we need, is just another social network, for friends with benefits. I'm certainly well aware of hawala as a concept, I guess most of us here are. It's an entirely different approach to Bitcoin, involving trust in third parties. The two are not mutually exclusive, but they are completely different systems.Title: Re: Interest in a P2P Exchange Post by: aceking on May 20, 2013, 07:20:07 AM how you will wire money in a p2p exchange ? , i don't see it possible.
Title: Re: Interest in a P2P Exchange Post by: themusicgod1 on May 20, 2013, 08:48:04 AM I'm talking about a secure protocol that is P2P and totally decentralized. I understand Ripple accomplishes this but it is controlled by a single entity and regulatable Ripple will be completely decentralized. It is not designed to be a 'single entity', and though there will be nodes that will be regulated -- there will be those which will not. The final project is however not yet complete, though they must be getting close by now. Unfortunately I don't understand how ripple accomplishes this, it requires a network of friends to develop a trust relationship, so for those who have never used it before and don't have friends that use it, its worthless? Or am I just missing something. The 'something' you are missing is Gateways, which obviate the reason for these difficulties. Obviously, it's better if you have the network of friends and trusted contacts, however. Title: Re: Interest in a P2P Exchange Post by: waxwing on May 20, 2013, 09:20:09 AM how you will wire money in a p2p exchange ? , i don't see it possible. My suggestion was: https://bitcointalk.org/index.php?topic=205796.msg2197907#msg2197907 (earlier in thread) Title: Re: Interest in a P2P Exchange Post by: Namealreadyexists on May 20, 2013, 06:34:27 PM because the third party can never take the money It is not enough. There should be a mechanism for the 3rd party to make the right decision, and I don't see that being addressed by the escrow system. For example me and you agree to trade my bitcoins for your USD. I put the bitcoins in escrow, you wire me the money, now it's turn for the 3rd party to release my bitcoins to you. Based on what? If I don't admit I received your USD, you'll have to initiate a dispute, provide your bank statements, etc and this is becoming just another legal battle. How is the 3rd party supposed to get perfect information to make the right decision? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 20, 2013, 06:38:43 PM Quote ipple will be completely decentralized. It is not designed to be a 'single entity', and though there will be nodes that will be regulated -- there will be those which will not. The final project is however not yet complete, though they must be getting close by now. I've asked the Ripple community several time to record a lecture for the Bitcoin Education Project on how ripple works and explain how to conduct commerce. They have never replied back. I really hate being ignored. Yet, until I get a detailed explanation on Ripple, I honestly don't know if what you are saying is completely correct. Title: Re: Interest in a P2P Exchange Post by: solex on May 20, 2013, 09:54:06 PM Quote ipple will be completely decentralized. It is not designed to be a 'single entity', and though there will be nodes that will be regulated -- there will be those which will not. The final project is however not yet complete, though they must be getting close by now. I've asked the Ripple community several time to record a lecture for the Bitcoin Education Project on how ripple works and explain how to conduct commerce. They have never replied back. I really hate being ignored. Yet, until I get a detailed explanation on Ripple, I honestly don't know if what you are saying is completely correct. If this project is to be permanently derailed then the way to do it is by trying to get it done via Ripple. My suggestion was: https://bitcointalk.org/index.php?topic=205796.msg2197907#msg2197907 (earlier in thread) This is the best outline solution thus far. Title: Re: Interest in a P2P Exchange Post by: usscfounder on May 20, 2013, 10:22:44 PM I am designing a P2P cryptocurrency exchange that can plug into sites like mtgox and btce:
https://bitcointalk.org/index.php?topic=209269.0 USSC Litecoin-P2P-Server - A Decentralized P2P Client-Server Application & Exchange For Fast Transactions That Utilize Any Cryptocurrency Application Features: 1. Directly and internally handles wallet.dat files and the Bitcoin/Litecoin protocol. 2. Completely separate database for user accounts with decentralized replication of virtual-server to other P2P servers. 3. Utilizes banks of wallet.dat files that are not mapped to any specific user account. Evenly distributes coins to internal banks of wallet.dat files. 4. End-user client software accounts are assigned to specific virtual-server allowing transactions speeds comparable to a centralized system like Visa, MasterCard, and Pay-Pal. 5. End-user accounts and wallet.dat banks are replicated to other P2P servers. 6. P2P server network monitors each other for online or offline status. Virtualization server replication to replicate virtual servers across network in the event of physical server seizure or DDOS attack [virtual servers house wallet.dat banks]. 7. Double spend attacks are mitigated by denying end-users access to wallet.dat files or banks. [Wallet.dat files are internally encrypted]. 8. Uses Bitcoin/Litecoin protocol as a lower level protocol like web-browser applications use the transport layer in the OSI model stack. 9. Uses Bitcoin/Litecoin client and wallet.dat files as lower level application. 10. Eliminates need for confirmations by end-user clients and web-server or web based services. 11. No need for end-user to keep wallet.dat files on local computer or phone. Account is in the P2P cloud. 12. Account cannot be frozen or seized by anyone - even the server operator. 13. No changes to the existing Bitcoin/Litecoin network or protocol. Utilizes existing Litecoin network and protocol. 14. End-user application plug-in to existing Bitcoin/Litecoin client. 15. Government cannot track nor trace nor freeze your funds. 16. Funds cannot be traced. 17. Anyone can run a Bitcoin/Litecoin P2P Server (it's decentralized). If the server goes offline or is seized, the virtual server, accounts, and wallet.dat files are still safe and reallocated to other P2P servers. 19. Can be used as an peer-to-peer (P2P) exchange. Can utilize other exchange sites such as btc-e and mtgox for fiat conversions. 20. Completely Open Source. This is how to best use cryptocurrency protocols Bitcoin and other altcoins are best suited to operate as lower level applications and should not be designed for direct end-user control or use. Like web browsers use tcp/ip for lower level operations, the Bitcoin application and protocol should operate much the same way. End-user applications and services need to be built on top of the Bitcoin protocol and application. There is no need to write code from scratch. all of the above can do coded by combining the bittorrent protocol [for virtual server and wallet.dat bank replication] and onion router protocols [for P2P Server communication] with the existing Bitcoin/Litecoin protocol [This would make a hybrid bittorrent/onion router/Litecoin application]. I will post on here design specs but I will not code it for you. You have my permission to use the above designs. I will not make a patent or copyright claim against you so long as you keep it open source. I do not own any patents on the above system. It came from meditation and thought. You don't necessarily have to use the Litecoin protocol, Bitcoin or Worldcoin will work as well. But I recommend the Litecoin Protocol [fast and secure]. I have been an Active Directory admin, and MS Exchange admin, Banyan Vines Street Talk Admin, And have supported everything from X.25 to X.400 and Protocols from RIP, OSFP, BGP, etc... If you have any questions on how to design the application, I will post answers on here. You can PM me or just post your design questions here. I will help you. If you code an application for this then please give me credit for some of the design. That is all that I ask and maybe a little donations in Litecoin [PM me for address]. Get to Coding. Thank you. USSCFounder Here are some of the first design specs to help you code the above system. The system should be coded to run on an LAMP server using PHP and MySQL only. Perl can be used to facilitate server side scripts and systems commands as well. The end user client or plug in can be coded in C if desired. Virtual Servers Virtual servers are just database tables that give a type of centralization to P2P servers facilitating a single point of transaction for a specific user account; thus allowing for speedy transactions that could not be otherwise obtained by conventional P2P cryptocurrency networks. Virtual servers can be configured to be reassigned to other physical servers in a few minutes in the case of ddos attacks or physical server seizure by authorities. virtual-server-001.user.table user-id-key | coins.litecoin | coins.bitcoin | coins.namecoin (bob) XXXuser-id-key-001XXX | 100 | 0 | 20 (alice) XXXuser-id-key-002XXX | 0 | 100 | 20 The coins can then be evenly distributed so that no one account can be linked to any specific wallet: virtual-server-001.litecoin.wallet-bank-001.table wallet-id | coin-amount wallet.vs-001.bank-001.litecoin-01.dat | 25 wallet.vs-001.bank-001.litecoin-02.dat | 25 wallet.vs-001.bank-001.litecoin-03.dat | 25 wallet.vs-001.bank-001.litecoin-04.dat | 25 virtual-server-001.bitcoin.wallet-bank-001.table wallet-id | coin-amount wallet.vs-001.bank-001.bitcoin-01.dat | 25 wallet.vs-001.bank-001.bitcoin-02.dat | 25 wallet.vs-001.bank-001.bitcoin-03.dat | 25 wallet.vs-001.bank-001.bitcoin-04.dat | 25 virtual-server-001.namecoin.wallet-bank-001.table wallet-id | coin-amount wallet.vs-001.bank-001.namecoin-01.dat | 10 wallet.vs-001.bank-001.namecoin-02.dat | 10 wallet.vs-001.bank-001.namecoin-03.dat | 10 wallet.vs-001.bank-001.namecoin-04.dat | 10 (MORE TO COME) Additional design specs: virtual-server files can then be propagated to other P2P servers simply by sharing the files via bittorent to the other P2P servers: virtual-server-001 files to be propagated to P2P network: virtual-server-001.user.table virtual-server-001.litecoin.wallet-bank-001.table virtual-server-001.bitcoin.wallet-bank-001.table virtual-server-001.namecoin.wallet-bank-001.table wallet.vs-001.bank-001.litecoin-01.dat wallet.vs-001.bank-001.litecoin-02.dat wallet.vs-001.bank-001.litecoin-03.dat wallet.vs-001.bank-001.litecoin-04.dat wallet.vs-001.bank-001.bitcoin-01.dat wallet.vs-001.bank-001.bitcoin-02.dat wallet.vs-001.bank-001.bitcoin-03.dat wallet.vs-001.bank-001.bitcoin-04.dat wallet.vs-001.bank-001.namecoin-01.dat wallet.vs-001.bank-001.namecoin-02.dat wallet.vs-001.bank-001.namecoin-03.dat wallet.vs-001.bank-001.namecoin-04.dat It is that simple to make a virtual-server. Each P2P server would have local copies of the virtual-servers on the network but only a few would actually be online. Every virtual-server would exist in an online state only on one of the P2P servers on the network. That means if virtual-server-001 was online in a New York P2P server, an exact copy of it on the Moscow server would be offline. In the event that the New York server was seized or ddos'ed and went offline, virtual-server-001 would then come online in Moscow. Its a layered P2P application; one P2P application layered on top of another P2P application. (MORE TO COME) Title: Re: Interest in a P2P Exchange Post by: toffoo on May 21, 2013, 03:52:29 AM I can envision some clever developer coming up with an open-source distributed exchange client that could perhaps cryptographically escrow your BTC and LTC holdings, maintain a distributed order book, and then instantly swap the BTC for LTC when a trade has been agreed, without counterparty or clearing risk. Something like that would probably catch on. I am designing a P2P cryptocurrency exchange that can plug into sites like mtgox and btce: ... Well that was quick! Title: Re: Interest in a P2P Exchange Post by: areebmajeed on May 21, 2013, 06:55:46 AM I know how to make a p2p Exchange >> I'll come to your house and I will give you a dollar.
Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 21, 2013, 07:41:12 PM Anyone interested at taking a shot of a summary and recap of what we currently know about P2P exchanges?
Title: Re: Interest in a P2P Exchange Post by: usscfounder on May 21, 2013, 11:38:36 PM I am updating the post daily:
https://bitcointalk.org/index.php?topic=209269.0 I have figured out a way to create a decentralized orderbook with built in security against fraud and ddos. I will post my design updates daily. Check the post daily. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 05:03:40 AM ussc this is solid work. Could you PM me your contact info.
Title: Re: Interest in a P2P Exchange Post by: BTCLuke on May 22, 2013, 09:03:00 AM This thread has degraded past repair. Let's step back to the last logical point and pick it up over here:
https://bitcointalk.org/index.php?topic=212841.0 (https://bitcointalk.org/index.php?topic=212841.0) Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 03:36:52 PM Quote This thread has degraded past repair. Let's step back to the last logical point and pick it up over here: https://bitcointalk.org/index.php?topic=212841.0 Lol, the purpose of the thread was to ask about the community's interest in P2P exchanges. It definitely has worked. That said, fucking nice thread Luke. Seriously its exactly what I was looking for. Title: Re: Interest in a P2P Exchange Post by: CypressXM on May 22, 2013, 03:42:08 PM Anyone interested at taking a shot of a summary and recap of what we currently know about P2P exchanges? Summary: Retarded idea. There is currently no way to implement a p2p exchange. The problem is there is no way to move fiat. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 03:44:32 PM Quote Summary: Retarded idea. There is currently no way to implement a p2p exchange. The problem is there is no way to move fiat. Thanks for your kind words. Title: Re: Interest in a P2P Exchange Post by: usscfounder on May 22, 2013, 03:46:05 PM I have created a system for a P2P orderbook here:
https://bitcointalk.org/index.php?topic=209269.0 I figured out how to make a P2P Orderbook for a decentralized exchange: I am updating the post daily but will add more in a few minutes: https://bitcointalk.org/index.php?topic=209269.0 Decentralized Orderbook - BTA System (Bus - Train - Plane) More here in a few minutes:BTA - Bus. Train. Plane. BTA is a concept I came up with the solve the problem of a decentralized orderbook for P2P systems. BTA is a system to move orders from Tier I exchange nodes to Tier II exchange nodes to Tier III exchange nodes according to a predetermined cycle. BTA is a system akin to a mass-transit public transportation system. example: In a mass transit system you could have a bus that would route and cycle through a city with 25 bus stops, stopping at every stop to pick up people. The bus would then drop all of the people off at the last stop which for the purposes of this demonstration is the city's train station. The bus would then repeat the cycle continuously bringing more and more people to the train station. Eventually the train would arrive to that city and pick up the people who got off the bus and are waiting at the train station. The train would then continue on and cycle through all of the cities of that particular province/state picking up people (who were dropped off by the bus) at every city train station. At the end of the train route would be an airport with a planes ready to pick people up and take them to a specific destination. The train would cycle continuously through all of the cities picking up people and dropping them off at the airport. The people who were first on the bus and then on the train and now at the airport would then board the plane (jumbo jet if you will) and travel on the plane from the province/state they were in to a final location all the while making stops in every major province/state of that country to pick up additional people. After the plane arrived at the final location it would take off again and cycle through all the provinces/states of the country continuously picking up and dropping off people. Now, imagine if you will a dating and match making service on one of the sides of that county that has a big convention to help people find a spouse. That service decides to utilizes the same aforementioned mass transportation system to bring people together from all over the country. People would leave their homes and go to the bus stop. Some people would find compatible matches for themselves at the bus stop or while riding on the bus. Those people would get off the bus pay the fee and then go home with no need to go to to the convention. Those people have what they want; a spouse. The rest of the people would continue on to the train station and get on the train. But again some people would find matches on the train and at the station; so, they too would pay the fee and go home. They have what they want; a spouse. What remains of the people would continue on to the airport then get on the plane to go to the convention hoping to find a good match for a spouse. A P2P BTA (Bus-Train-Airplane) exchange would operate the same way only picking up orders instead of people. (More in a few minutes) https://bitcointalk.org/index.php?topic=209269.0 Here is how it works: P2P BTA Application How does it work? In a P2P BTA system a "Bus" exchange node would cycle through and collect orders from P2P "home-server" nodes mentioned in the above posts. "Home-server" nodes house user accounts and wallets in a P2P network. 1. The Bus exchange server node would collect orders from home-server nodes 1 through 25 (for example). 2. Matching orders (if any) are fulfilled in a mini exchange. Receipts are generated. All unfulfilled orders and receipts are then stored for pickup by an "Train" exchange node. 3. On a predetermined cycle the higher Train exchange node would pick up all of the unfulfilled orders and receipts from all four (for example) of the Bus exchange nodes in the P2P network. All matching orders are fulfilled in a medium sized exchange and more receipts are generated. Again, All unfulfilled orders and collected receipts are then stored for pickup by an "Airplane" exchange node. 4. Finally, on a predetermined cycle the higher Airplane exchange node would pick up all of the unfulfilled orders and receipts from all four (for example) of the Train exchange nodes in the P2P network. The Airplane exchange is the highest exchange on our example P2P network. All orders would attempt to be fulfilled here. Collected receipts are used to generate reports and to display fulfilled orders. In our example P2P network, if no orders were fulfilled by the Bus or Train exchange nodes then the Airplane exchange node would have picked up 400 orders. (MORE TO COME LATER TODAY) https://bitcointalk.org/index.php?topic=209269.0 Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 04:47:59 PM Did you come up with an idea but couldn't get funded? I am considering funding some new ventures in the Bitcoin community after the Summer and if there is a working P2P exchange on the table, then it would be high on my list. Let's start a discussion. How much money do you have available for this investment? Seriously, give a rough estimate in USD or BTC Over the Summer, I'm going to be doing a huge amount of reading and coding for my course: https://www.udemy.com/bitcoin-or-how-i-learned-to-stop-worrying-and-love-crypto/ Is there a single threat on this forum you contributed and didn't yet mention these fantastic courses of yours? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 05:05:16 PM Quote How much money do you have available for this investment? Seriously, give a rough estimate in USD or BTC I'd be happy to discuss investments over email or in a PM. Investment would be proportional to return and likely around low 6 figures for the angel phase. Quote Is there a single threat on this forum you contributed and didn't yet mention these fantastic courses of yours? Probably not because the course is community built and forever free. I will continue to solicit feedback, contributions, marketing support and donations for the Bitcoin Education Project until it has reached its goal of educating one million new people on Bitcoin. I can't accomplish that alone and it is in everyone's best interest to bring well-informed people into the ecosystem. Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 05:09:52 PM I'd be happy to discuss investments over email or in a PM. Investment would be proportional to return and likely around low 6 figures for the angel phase. Okay, so you have between USD 100,000 and 500,000 available for an investment, correct? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 05:15:50 PM Yes
Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 05:21:07 PM Yes Can you please specify the rate of return you expect to get on your investment and over what period of time? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 05:28:01 PM Quote Can you please specify the rate of return you expect to get on your investment and over what period of time? It is incredibly difficult to determine VAR in something related Bitcoin and it is entirely possible to design a P2P exchange without any profit to a central hub. I may assess my ROI based upon the effect having an exchange like the one BTCLuke described would have on the value of my current bitcoin holdings. For example, this exchange would functionally remove most of the liquidity issues resulting in actors like Amazon and Paypal likely entering the market. Such an increase in demand could drive the price per BTC up at least an order of magnitude. As the initial investment is measured based upon its effect on the price of bitcoin, my investment would be proportional to my holdings of btc. To answer your question, I would view an investment of this nature as a gamble. I would be entirely ok with losing everything for a chance at seeing this work. Thus I may consider an X-Prize style investment with a set of criterion and the first person to satisfy them would receive the prize. Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 07:04:16 PM Quote Can you please specify the rate of return you expect to get on your investment and over what period of time? It is incredibly difficult to determine VAR in something related Bitcoin and it is entirely possible to design a P2P exchange without any profit to a central hub. I may assess my ROI based upon the effect having an exchange like the one BTCLuke described would have on the value of my current bitcoin holdings. For example, this exchange would functionally remove most of the liquidity issues resulting in actors like Amazon and Paypal likely entering the market. Such an increase in demand could drive the price per BTC up at least an order of magnitude. As the initial investment is measured based upon its effect on the price of bitcoin, my investment would be proportional to my holdings of btc. To answer your question, I would view an investment of this nature as a gamble. I would be entirely ok with losing everything for a chance at seeing this work. Thus I may consider an X-Prize style investment with a set of criterion and the first person to satisfy them would receive the prize. Come on. This is a non-answer. Tell me point blank the region of IRR you want. If you do not like IRR you can use other method you will calculate your expected return. You mentioned ''return'' as one of the components of your investment scheme. I simply want to know what return and over what period of time you expect. This isn't a difficult task, is it? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 07:06:25 PM For a venture of this nature, I'd like an ROI around 200-300 percent of capital at risk over a 24 month period.
Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 07:14:45 PM For a venture of this nature, I'd like an ROI around 200-300 percent of capital at risk over a 24 month period. Now, we are getting somewhere. How do you calculate your ROI? There are tens of different formulas for ROI over the internet. I would like to know the formula you will be applying. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 07:42:02 PM Lol, there really isn't one because I'm basing my ROI on the impact a P2P exchange would have on the price and stability of bitcoin. It wouldn't be possible to measure this outside of saying it has a significant impact.
Let's change the question to asking what factors would it take for the value of bitcoin in USD to increase an order of magnitude? First, I believe bringing several millions of people into the ecosystem would be a significant factor. Second, large business adoption would also contribute to this increase. Finally, stable exchanges that are beyond the scope of regulation and capable of scaling to any amount of transactions. I firmly believe that if these three factors are properly implemented Bitcoin's value will be over 1,000 USD per coin. I have fairly sizeable holdings in BTC thus I have an incentive to see them through. Hence I launched the Bitcoin Education Project to bring millions into the ecosystem. I've been discussing with many people in the community how to bring large corporations into the Bitcoin ecosystem. And the last piece is the P2P exchange. I'll guess each have an equal part and thus are worth 1/3 of the order of magnitude price increase. Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 08:01:42 PM Come on, just give me the formula you will calculate ROI.
People who are interested to get your money want to know your investment criteria in a an easy calculable form, to see if they can meet these criteria. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 08:09:29 PM The formula I'm using is based upon my current holdings in bitcoin. If I was to divulge it, then I'd be instantly telling everyone the approximate size of my holdings in bitcoin as soon as I make an investment and state my expected return.
If I invest in someone's project, then it will be in the form of a grant without any equity or return expectation. My returns come directly from the appreciation of bitcoin. Sorry mate. Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 08:41:06 PM If I invest in someone's project, then it will be in the form of a grant without any equity or return expectation. What do your courses say about the way you want to non-protect your investment? Sorry, couldn't resist, mate. Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 08:43:59 PM That it's a terrible idea :) But making Bitcoin more valuable for everyone is a good business strategy and one I suppose people here would get behind regardless of how much they dislike me.
Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 08:56:52 PM 1. What kind of control will you exercise over your investment. Will you engage in operations, strategy, others?
2. Have you ever bought a business / invested in one? Title: Re: Interest in a P2P Exchange Post by: charleshoskinson on May 22, 2013, 09:11:01 PM Quote 1. What kind of control will you exercise over your investment. Will you engage in operations, strategy, others? For a grant, it would be for the production of peer reviewed research thus none whatsoever. For an X-Prize, I fund a trust that has triggers to give the money to someone who "wins". These would be based upon BTCLuke's criterion amongst other factors. I probably wouldn't be the only party involved in this investment. Quote 2. Have you ever bought a business / invested in one? Yes, and those affairs are private as are yours. Title: Re: Interest in a P2P Exchange Post by: BTCLuke on May 22, 2013, 09:49:10 PM Lol, the purpose of the thread was to ask about the community's interest in P2P exchanges. It definitely has worked. That said, fucking nice thread Luke. Seriously its exactly what I was looking for. I apologize... There was just too much talk about Ripple in here just before I posted that. ;)Looks like usscfounder has added a few good ideas here too. Title: Re: Interest in a P2P Exchange Post by: Loozik on May 22, 2013, 10:05:18 PM The problem I see with your investment approach is this:
1. You want to invest / risk a capital of $100k - $500k over 24 months in a Bitcoin-related venture. 2. You want to get - by your own words - ROI (Return On Investment) around 200-300 percent of capital at risk over a 24 month period For a venture of this nature, I'd like an ROI around 200-300 percent of capital at risk over a 24 month period. 3. Then you say you do not want to calculate your ROI on the capital you will invest in the venture, but - by your own words - you want to calculate ROI from the appreciation of bitcoin My returns come directly from the appreciation of bitcoin. Sorry mate. 4. Hypothetically: a) if the venture fails (some ventures fail you know) and you lose your $100k - $500k invested, but b) bitcoin value appreciates by 200% - 300% independent of your business failing (or even succeeding) you would still calculate your ROI (Return on Investment) at 200% - 300% even if your venture goes bankrupt? Come on, this simply makes no sense. I suspect you started another non-thread to promote your courses. 5. Finally, when asked whether you had bought or invested in a business before, you replied ''Yes''. I did many MBOs and LBOs during my carrier in venture capital business; trust me, you have no idea what buying businesses is about. Title: Re: Interest in a P2P Exchange Post by: k99 on February 13, 2014, 01:40:41 PM Summary: Retarded idea. There is currently no way to implement a p2p exchange. The problem is there is no way to move fiat. There is: I just announced a proposal for a P2P Fiat-Bitcoin Exchange which solves the "how to get the fiat in/out" problem. BANK RUN! - P2P Fiat-Bitcoin Exchange https://bitcointalk.org/index.php?topic=462236 Title: Re: Interest in a P2P Exchange Post by: td services on February 13, 2014, 07:33:16 PM Summary: Retarded idea. There is currently no way to implement a p2p exchange. The problem is there is no way to move fiat. There is: I just announced a proposal for a P2P Fiat-Bitcoin Exchange which solves the "how to get the fiat in/out" problem. BANK RUN! - P2P Fiat-Bitcoin Exchange https://bitcointalk.org/index.php?topic=462236 Yep! This is the way to do it, and the only way I've been able to think of keeping Bitcoin and other crypto currencies free without being limited to doing exchanges in person. Very good job, k99. Title: Re: Interest in a P2P Exchange Post by: alex_bronco on February 21, 2014, 07:21:31 AM Personally, I have no interest in daytrading. And I would never participate in anything with even a whiff of Ripple to it. It's completely centralized, and I want no part of it.
Title: Re: Interest in a P2P Exchange Post by: Peter Lambert on February 21, 2014, 01:54:07 PM Personally, I have no interest in daytrading. And I would never participate in anything with even a whiff of Ripple to it. It's completely centralized, and I want no part of it. We just need to make a decentralized version of Ripple, right? Title: Re: Interest in a P2P Exchange Post by: JusticeForYou on February 21, 2014, 02:08:13 PM I like the idea of a P2P exchange.
Scientific Statistical Polling algorithms would need to be written into the client. People trading would report what the exchange rate was for each trade. I think it would be better to only count Smart Phone Trades to start to keep 'outliers' to a minimum but with proper execution we should be able to get to a proper average price. I'd align the idea of Singular Exchanges for every transaction aggregated through algorithms to determine a moving average. Plus, using Smart Phone services when it come time to trade, you could turn ON the option for Trading and quickly locate local traders with their Trading option in the ON position. The down side is 'Large' trades but that's for others to worry about. I'd rather see the average guy quickly get into and out of BTC and let the 'big' guys solve the big trade problem. Title: Re: Interest in a P2P Exchange Post by: Sukrim on February 25, 2014, 12:46:21 AM Personally, I have no interest in daytrading. And I would never participate in anything with even a whiff of Ripple to it. It's completely centralized, and I want no part of it. We just need to make a decentralized version of Ripple, right?It looks like many people expect Ripple to have decentralized fund storage too or think it would be possible to have trustless distributed funds storage. Nope, just look at all these threads that pop up from time to time... they all so far were easily able to be backmailable or just work on crypto currencies in the first place. Title: Re: Interest in a P2P Exchange Post by: mecoin on February 28, 2014, 05:43:02 PM Personally, I have no interest in daytrading. And I would never participate in anything with even a whiff of Ripple to it. It's completely centralized, and I want no part of it. We just need to make a decentralized version of Ripple, right? This sounds to be a good idea 8) Title: Re: Interest in a P2P Exchange Post by: k99 on February 05, 2015, 02:33:35 PM I know that this topic is a bit out of date, but just in case you are still interested in a P2P Fiat-BTC exchange, I wanted to post an update of our project and announcement for our crowd funding campaign which will end in a few days (on February 9th).
Bitsquare released an alpha version in December and it can be tested at our regular testing sessions with other traders (testnet). Today 17:00 CET we have such a session. Feel free to join us on our IRC channel #bitsquare-trading on Freenode. Further information can be found here: https://github.com/bitsquare/bitsquare/wiki/Bitsquare-WAN-Parties Regarding the crowd funding campaign: We are using Lighthouse as decentralized crowd funding solution to iteratively fund the development of every milestone, leading to a fully functional version 1.0. The funding goal is 120 BTC for the next milestone and the campaign ends in a few days on February 9th. Please visit our web page for more details: https://bitsquare.io/crowdfunding If you like to support that project please help us to spread the word. Best regards, Manfred |