Bitcoin Exchanges/ brick and mortar end points will always be the weakest link in the eco-system. We just got a full HD demo from China today.
While, these moves cannot damage Bitcoin much, by design, Bitcoin was meant to be more of a F2F kinda commodity.
How can these F2F transactions be tracked and how can they influence/ set the market prices?
Anyone who has been working on something like this and would like to exchange some notes would be awesome.
To eliminate these exchanges, what can be done is when a F2F transaction is done, along with the address, and amount exchanged also put the price at which the exchange is done.
Then the block chain, will calculate the avg. price of the btc at that moment, due to this transaction.
This can eliminate exchanges, but its just a stupid idea. Because there are many flaws...and you would have guessed them.
Thus we even THOUGH the exchange is weekest link, its important one.
Refer to E07 of Letstalkbitcoin.com , its an audio series discussing about bitcoin. In this perticular episode they talk about exchanges. Although it was recorded in April i think, but it indicates the same things that we are seeing now.