Its true that Bitstamp is very good.

But I would like to have more than one exchange that is "very good" and although I have never used MtGox, nobody seems to have a nice word to say about them right now.

So I too have been thinking whats wrong and how should an exchange be written? This is blue sky ideas on paper: please forgive any naiveties, I have never written an exchange before. 

As I daily walk past the original London stock exchange building, I got to thinking how did exchanges work in the 1940's and 1950's. No Computers see. Well the answer is that people (brokers) acted as agents bundling up small trades into bigger ones that they would pass higher up the chain, sometimes accepting some of the risk themselves, while all the while the newspapers acted as a daily heartbeat of what the rates were at the highest level. Only the very largest bids or offers would findthemselves on the stock exchange floor. At least thats my my view and it would be viable with Bitcoin.

So what happens is that we have a database and a trading engine one one non-specialist machine. This softaware can run on many machines as needed, but a user registers with a single database. There is negotiation, perhaps on a p2p basis between machines using keys.  If machine A has more sells and machine B more buys, then this and other "done deals" are forwarded to equalise between the two.

Now the advantage of this is that it is completely an uttly distributed model. The communications would be encrypted and only carried out on the basis of virtual cryptographic identities just like bitcoin. Thus each exchange knows that it is dealing with a bonafide other exchange running the same software. In the same way that a small time stock broker of the 1950's would have been very much trusted to keep to his word based on his identity, and to settle up in three days time, and if he ever didnt he would know he would never trade again.  This was an age in which a cheque really did take 3 or 4 business days to clear, and there was no fast clearing.

Another advantage is that there should be little lag because the communication between exchanges is not essential for trade, it is essential to decide which business exchanges push to each other rather than make themselves. Indeed this is really rather similar to a built in arbitrage. Arbitrage - where people take advantage of slightly different prices on different exchanges also serves to equalise up exchanges. One possibility would be to build into the market excellent arbitrage facilities as another method of keeping exchanges in step.

Indeed, keeping the exchanges many and small I see as having so many advantages. Large trades can still be placed because these would still be spread around other exchanges. If someone deposits a cool million fiat and trys to buy bitccoins , the exchange software should rapidly redistribute this via the heartbeat.

Thoughts?

2013-04-19  twin-half page article in "The Metro" a free newspaper read by most of London's commuters:
You can read it here (4M download.)
http://anonymouse.org/cgi-bin/anon-www.cgi/http://img801.imageshack.us/img801/476/bitcoin3aa.png

Well I have a method that I think will work and avoid all these problems. It uses magnetically induced eddy currents, and uses no test leads. It measures energy loss in the coin or bar. It tells you thickness - if the conductivity is wrong, the thickness will be out by the same factor. (Typically a factor of 1.5 or 2)  BUT I could really do with a transformer like the one I described to test this. Someone must have one??

There is a factory in China that makes fake gold coins, so far as I know it has been making them for many years. They are made of tungsten, and gold plated. The density of Gold and Tungsten is nearly exactly the same, far to close to call.

The electrical conductivity is very different, and so too I imagine is the thermal conductivity. Goldmoney.com use a sonar device to check all their bars for suspicious inconsistencies, and I am sure you would see a core of different material, but I am not sure if you would be able to tell if the whole bar was made of Tungsten and gold plated, as seems certain some are.

So far as silver is concerned, there are (I suppose) many alloys that would have the right density, but the right conductivity would be impossible to fake - silver is the best metalic conductor known.

I believe an induced eddy current method could work very well.

Hmm, I have an idea for that too.  But I need something and wondered if anyone has it.  You used to be able to buy a transformer where the core is retangular, and the primary and secondary are on seperate bobins.

So I want to remove the secondary and then cut a 1cm air gap in the core that I can easily fit a coin or even a gold bar into.

This doesnt really work well with the normal "B" shaped transformer core. So if anyone has one of these in their junk box, I would really appreciate it...

Haha! Exactly what I had in mind!!

I am glad it actually worked well :-)

Ok, I'll explain the "frame" a bit more. You can make it out of a coathanger, but ideally something a bit flimsier is lighter and so better. It does not have to  be totally rigid, if it moves out of shape, it doesnt matter. I use copper wire because its easy to bend and holds its shape.

Here is a diagram:                                                  .------------.
                                                                           |              |
                                                                     ________        |
     Scales                                                         :::::::::         |
     Table edge     ===========================       |
                                                                                          |
                                                                                          |
     Bent Wire Frame                                                 .-----------.
                                                                            .
     Cotton Thread                                                    .
                                                                            .
                                                                            .
                                                                   |        .        |
     Object                                                      |      |||||     |
                                                                   |                 |
                                                                   |                 |
     Beaker of water                                        |                 |
                                                                   |                 |
                                                                    .__________.

                                                                       
The frame can be C shaped, it doesnt have to be rectangular, the important point is that the object is directly under the place where it rests on the scales so that it balences.  In fact it will pretty much hang that way anyway.

I have drawn a table in here, and you do want the scales to be horizontal and not moving, so this is quite a good way to do it. You take two mass measurements as |I explained, first with no beaker or water, then you raise the beaker and note the loss of weight due to boyancy with the object fully submerged.

Now one problem here is that any airbubbles that stick to the object represent an inaccuracy. Really you would like to use a bit of soap to prevent this, but that might alter the purity of the water. If you use a very small amount this would probably be a good idea. There is an alternative however. You can use any liquid provided that you take its density into account, so if you decided to use say parafin, because you will not get air bubbles in parafin because of the low density. But you probably do not know the density of parifin given thatit may vary quite a bit from sample to sample. So, use a known good coin or other object as a "calibration", that gives you the density acurately, which you can then use in your calculation of the 2nd object. The known good coin in fact can be anything you know the volume of, a freshly minted coin is convienient since you know the mass and the density of the material its made to high accuracy, so you know the volume!! But A 1cc cube or other known volume  of anything that sinks (in parafin) would be just as good.

Yeah, this is probably overkill, the smidgeon of soap method would be much simpler and probably work just fine.

Well, for a start at no point does the weight of the beaker of water go on the scales. Your photograph seems to show the beaker of water on the scales. The point about these small scales is they are very accurate for small masses, less so for larger masses. Especially so as regards repeat readings which of course is what counts. Partly its a percentage thing. So its much better to not weigh large weights as far as you can. My method does involve weighing a wire frame so that you can weigh under the scales (and submerse the dangling object in water, which of itself is never weighed. You could use a 100 ton bucket of watter when weighing a 10g coin, and it would make no difference.

I think you are displacing the water out of the contain. There is an acuracy problem with this, and that is that surface tension may result in inconsistent results. Its inherrently sticky, and a few drips more or less may splut out as you do it. Any amount of grease or detergent on the object may also change the surface tension and that is worse. You may say its a trivial amount, but the point is, its multiplied by the comparatively large area of the top of the beaker. So it ends up as quite a bit.

They take the hit, they don't have much choice, grumble loudly, and then make sure that they never, ever let any money anywhere near a Cyprus bank again. The banks will then collapse and anyone who did not get their money out at the first chance will then lose what was left.

Many will decide never to let their major capital within smelling distance of any bank again ever. They will use shares, gold, and yes, of course, Bitcoin.  It seems to me that many governments here have fundamentally misunderstood the deal between a bank customer and the bank, and I for one will never put significant money in banks again.

I think all involved (and I am not) will feel this very strongly.

I dont think your method is correct. This is the method I used to satisfy myself that a oplatinum ring was truly pure.

a) Weigh Ring.   
b) Weigh ring under water.
    This can be done by suspending the ring on a frame such that it hangs from a thread, and is imersed.
c) As an alternative to b), weigh the difference in weight between b) and a) , many scales can do this automatically.

Either way, you have the in air weight , and the loss of weight from imersion in water, c.

c is also the of mass of water displaced, and so gives the volume of the coin or ring.
If you do this in grams, the volume is in cubic centimeteres.

The density (or specific gravity) is found as normal by dividing the weight in air in grammes by the volume in cubic centimetres.

I found this method pretty accurate.

Main sources of inacuracy, I guess:

 Water not pure - use deionised water.
 Density varies with temperature, both of water and of the metals, corrections could be applied for this.
 Make sure you weight the item before you wet it, you do not want to weigh a wet item.
 Displacement of anything used to hold item, minimal if it is a thread.

I believe that a modern 'cheap' pair of digital scales is more accuracy than you will need. For their price these items give fantastic value. Just bear in mind that the weight of the frame, which can be a bent wire to suspend the item in a beaker of water under the scales should be as low as possible. Although the frame is zeroed out of the calculations, the errors in these types of scales go up when you do this type of thing.

I think you can get better accuracy than you did by using this method.

I agree.

I think you'll find that its normally done using liquified carbon dioxide as a solvent, under pressure.

Dont forget if you have just invented probably the most significant thing since the internet, you are hardly going to destroy youu legacy by "Crashing" bitcoin even if you could.

And if he wanted to I am sure he could earn more money than you or I could imagine by quietly whispering, yeah and Bitcoin was one of my earlier projects...

You think he would need ever to withdraw those Bitcoins? I doubt it.  

Dead? Possible, of course, but super intelligent people have a habit of surviving, and I'd put him in this class.

You just wait until he releases the next thing he's working on. I doubt he has been Idle.

The US Dept defence tried something like this. See http://en.wikipedia.org/wiki/Project_Iceworm

It didnt work, as far as I can see because the ice moves and cuts the tunnels. Interesting though. That link should enable you to find other online references to this.

The normal meaning of the word "Crash" is a massive change in value. The MTGOX hack of 2011 did cause a crash, but a reduction of 10% in value or less is in no way a crash.

One of the things that you need to think about is how people would behave if the price fell by let us say 10%. If everyone is saying (to themselves) wow! if it falls 10% I'm selling, then that is the mechanism of a crash and thats how it would happen. More selling, a viscious circle. Thats what causes a crash.

My experiance is that in fact most people, noobs and pros alike, are saying Wow!, it falls 10%, Cheap coins, I'd be in there faster than you could say MtGox (or Bitstamp)!! I want to BUY!! In fact the fervour to buy during the recent "flash dip" I felt was almost indecent. There are many, many Geeks, that fully understand the beauty and mechanisms of Bitcoin and think that it is of massive utility and that there will always be a place in the modern world for Bitcoin. I cannot say if it will replace Paypal or visa, but you know it can be pretty successful without ever doing that, and in fact it just might. We can all see now that Paypals "method" of solving the money transmission problem, is just so wrong. They have made paypal work inspite of many problems, hats of to them, but its the old way to do things, its a dinosaur from the year 2000 and even they know it!

There is no doubt in my mind that the utility, and revolutionary nature of bitcoin is worth a very great deal, and this (to my way of thinking) is why a real "Crash" is unlikely. Geeks and others know this and would happly take advantage of any cheap coins that occurred. There would be no "vicious circle" and so no Crash.  As long as so many people believe in Bitcoin, (and they do), there will be no crash! Forks? How clever is it that because of the tree like nature of the blockchain, entries that become orphaned get incorporated into the true chain later on, sh** that is clever. Wow!! Forkproof? Well, nearly!

The day after the fork incident I came across a man in our local post office with a BIG wallet of £20 notes. The man at the counter would not accept them. They were old notes he said. Sure enough when I compared it to the measily one in my pocket, it was, the Royal Mint did a currency fork and invalidated the old notes without even telling me. This man had notes under the mattress and now has to got to a bank, fill in forms, say where he got the money etc, and it may be weeks before he gets it returned to him.
Fork proof? Noway!!

My advice is not to worry about a crash. You have the chance to buy something here that in a few years will most likely be worth between $200 to $1000. Think thats unlikely? Think again my friend.

You can use the Perl module Finance::Quote::GoldMoney

This scrapes the goldmoney home page and gives prices for Gold, Silver, Platinum, and Paladium.

Thank you SpaceJelly!!

All problems speedily resolved, I have sent you 0.68 odd bitcoins as I feel that your help has been well worth it!!

regards,

  Mark.

You are on.

So I'll pm you the ftp password and the existing wp login I guess.

Probably easiest would be to upload the sql file on the ftp?

Mark.

Hi,

Some cowboys developed a wordpress site for me. The site was demonstrated working on their demosite, and we have the files uploaded to the final site. (Although its not clear they have been uploaded to the right place.) We also have sql files that create the database for the site.

There are a few problems. If we run the sql they gave us to create the database (on an empty database), the site seems to work but all the links on it point to the demo website, which presumably is about to disappear. And also we loose all of the wordpress admin features. We cannot even login as wordpress administrator.

On the otherhand, running the sql given against the wordpress database that already exists (wp_505 I think) gives working admin facilities, but a broken site, just a white page.

What I need is instructions on how to fix this mess and or help doing so.  The cowboys said that the problem was that I would not give them unfettered login access to my hosters but I never said I would and I dont see that should be needed, should it? Wordpress was already installed.

I will give you ftp access to the site. I can show you the sql file we were given and make any database changes that you request of me.

I am offering 0.35 bitcoins for this when the site is working on the target url.

The site administrator (who initially paid the cowboys, in advance) wants to be able to be able to use the standard wordpress features to administer the site, and if we could use these, probably many of the corections needed could be done.

I am not asking you to alter the site except to make the demo that we have work, and the links point to our website and not the cowboys!

I think you should give the guy a small reward for his time and trouble, he had full access to your wallet, and you would have had NO way to recover those coins.

You are lucky indeed to have your password broken by such an honourable man!!