I've created an opensource project at http://btcpath.com/ which mirrors https://github.com/nfx9/btcpath

"This project has as it's goal to centralize objective information on Bitcoin exchanges, in terms of legal background, performance, fees, interoperability and so on. In the future this might include more dynamic featues such as feedback mechanisms from users of exchanges (rating, votes, etc.) or country specfic information. As the Bitcoin economy grows exchanges are an important link to the fiat money system. Interoperability and efficiency of the exchanges are therefore of high importance. The project wants to organize around opensource principles. These pages are editable through pull request on the Github repository."

I hope the site can function as the goto reference for information around Bitcoin exchanges. Obviously there is a lot of information which should be added for existing exchanges and up and coming exchanges. I think it would interesting to channel some feedback in communities in a structured way.

Pull requests, discussions through issues, etc., very welcome.

Hi,

I'd try to come up with a use-case where property is distributed globally. Probably the best integrated system is that of domain transfer, as opposed to say future contracts or stocks. Would it be possible to implement a domain escrow system on BTC? I'm not speaking of Namecoin, but the regime we are currently leaving under (ICANN).

[Basic datastructure of a market]

In this thread I want to develop some ideas around exchange markets and how they relate to bitcoin. I will start with a discussion of basic functions of a market, using some pseudocode or simulations. The idea is to evaluate what market models make sense, and if there could be alternative market models. If there are new forms of money one can speculate about new forms of markets. See Mike Hearn's work on this wiki https://en.bitcoin.it/wiki/Contracts or in the forum. Here I'm more interested in the market, than in contracts, i.e. I assume we use standard contracts as they are currently defined, such a stock ownership, bonds or futures. I should also point out there is a lot of academic research in this area, called microstructure and agent-based economics. Some of it might be useful, but I doubt it.

Basic datastructure of a market

So let's start to understand markets a bit, as they currently operate. By markets I mean financial markets, i.e. the stock market will serve as a reference. Basically any market which is operated by an exchange, such as the NYSE, the LSE, the Deutsche Börse, and so on (the NASDAQ actually has a different model than the NYSE).

The fundamental datastructure of a market is a limit order. A limit order signals a willingness to buy or sell a predefined product, at a limit price, with a given quantity.

class LimitOrder:   
   product = "stock.AAPL"
   action = "action.buy"
   quantity = 100
   price = 480

Then, in a double auction market you have a limit order book, which holds all limit orders which have not yet been filled. To we have to add to the LimitOrder a timestamp. This timestamp is given by the exchange at the point of arrival. The client doesn't necessarily know about timestamps. I will define what a client is perhaps later, but currently I assume that all clients are hooked up to the central node, the exchange.

Note that time is a crucial aspect of the willingness to buy or sell. In the example I don't intend to buy AAPL stock one year from now. A very typical assumption is to assume that the timeframe of my order is only one day. So we should add a property which says that the LimitOrder is GoodForDay. The new datastructure looks like this

class LimitOrder:   
   product = "stock.AAPL"
   action = "action.buy"
   quantity = 100
   price = 480
        timestamp = 1378974170.840874 # UTC. given by exchange at arrival
        timeframe = GFD # cancel on day's end

     

Network

We have a central server, which could be a certain legal entity as well. I assume this is a server which is known to all clients, say by a URL. Clients are just computers operated by the owners. We don't have brokers here. The clients and the server are connected, traditionally on a private network via UDP.

I assume that clients and server have protocol. Let's call this a trading protocol (TXP). In reality this is almost always the FIX, but I want to imply we could have different kinds of FIX'es.

Server: txp://account.exchange.com

Semantics

We have actions, which correspond to entering limit orders and canceling limit orders. There are no other actions, such as dispute mediation. Say for instance the servers fill my order at a price which is incompatible with my order. Then I'm filled at this price by force. I trust the exchange to operate always according to the protocol.

Clearing

Also there is no settlement yet. If I buy AAPL stock it is unclear how the stock will be transfered, so that I'm the legal holder of this document equipped with rights and obligations. Transferring rights electronically is the clearing mechanism which on a stock market takes usually 1-3 business days. Settlement requires that the transfer of ownership is in own namespace of law (jurisdiction).

[great]

Hello,

I find this forum endlessly fascinating and useful. Thanks for all the work.

Wouldn't it be great to a (re-)build a public internet forum with advanced functionality? Some part of the forum are much more than a message board and it would be really cool to facilitate that kind of activity (taking ideas from newer message boards, Stackexchange, Github, etc.).

Somebody requested an API a few days ago and I think that is a great idea. Why not go all the way and (re-) build something from scratch? Two quick examples: a) I would like to be able to have a feed to a user's posts (realtime, feed). b) if somebody chooses to be public that should be indicated. Basically the idea would be to opensource the forum software and have the community working on that, too, building on top of other projects.

[MtGox]

I want to gather some information about BTC exchanges, to evaluate how accessible they are from which country and monitor them in a structured format. All posts only on-topic please.


Caveat emptor

Quality of services obviously varies very widely. Posts are not endorsements of any kind at the current state.


List of exchanges

The current biggest exchanges by BTC volume are (according to http://bitcoincharts.com/markets/) (MtGox listed several times for different currencies).

mtgoxUSD 9752.45680602
bitstampUSD 8231.1511873
btceUSD 2507.51043954
btcnCNY 1918.332
btcdeEUR 522.3637794
virwoxSLL 493.43
cbxUSD 489.69346826
virtexCAD 475.612
bitcurexPLN 366.92670515
btceRUR 332.90685044
localbtcAUD 110.5349

Transfer methods

MtGox

All fund transfer methods below require either a verified or trusted account status.
Bitinstant
Japanese Domestic Transfer - Only for Japanese residents.
Polish Domestic Transfer - Only for Polish residents.
International Wire Transfer - Please note that we are unable to accept funds coming from any entity or country listed by the OFAC*
SEPA - Only for european residents

Bitstamp

SEPA deposits: FREE
SEPA withdrawals: 0.90 €
International wire transfer: €, $, £
Inter exchange and cash deposits

Graveyard

Dead exchanges:
Bitfloor
B24
...

Can somebody explain to me what these guys are doing? Creating a lot of buzz, then going dark after 5 days. what kind of joke is this? I think we need a new project, as they are clearly not committed to openness.

start downtime

~ 'Sun, 21 Apr 2013 14:30 UT'

Any banking experts here?

How does SWIFT work? It's a pure X25 protocol, so there are no measures to reduce counterparty risk? Are there countries which are not part of SWIFT? Does SWIFT define what a bank is depending on the jurisdiction?

The war around the future of finance has officially begun.. Poland and Germany have shutdown the 2nd biggest exchange. Effectively the moneys of the customers were frozen.

https://dl.dropboxusercontent.com/u/2329063/Beschluss%20Scan_geschwaerzt.pdf

Our Service is momentarily not available.
1. All funds (EUR, USD, PLN, GBP & Bitcoins) are safe.
2. All withdrawals will be gradually processed chronologically from another bank account.
3. The Polish authority closed our Bank account in Poland.
4. Our lawyers are working with high pressure on a solution.

Die Gründe für die Schließung unserer Konten durch internationale Großbanken sind uns nun bekannt und rechtlich mehr als fragwürdig. Unsere Rechtsanwälte gehen mit aller Konsequenz gegen dieses Verhalten vor. Wir gehen davon aus, dass wir kurzfristig wieder vollständig handlungsfähig sind und alle Geschäfte mit noch größerem Engagement im Sinne aller Nutzer vorantreiben können. Die Sorgen der Großbanken sind uns ein zusätzlicher Ansporn dabei! Wir werden sie zeitnah über die weitere Entwicklung informieren.
(English this evening)

Beschluss Polen
Einspruch gegen den Beschluss
Durchsuchungsbefehl

Released today. Converation from  23 of June 2011. Good analysis IMO.

http://wikileaks.org/Transcript-Meeting-Assange-Schmidt?nocache

Assange to Eric Schmidt: "You should be an early adopter. Because your Bitcoins are going to be worth a lot of money one day."

And very important, actually. It has a few problems. But its innovations exceed its problems. Now there has been innovations along these lines in many different paths of digital currencies, anonymous, untraceable etc. People have been experimenting with over the past 20 years. The Bitcoin actually has the balance and incentives right, and that is why it is starting to take off. The different combination of these things. No central nodes. It is all point to point. One does not need to trust any central mint. If we look at traditional currencies such as gold, we can see that they have sort of interesting properties that make them valuable as a medium of exchange. Gold is divisible, it is easy to chop up, actually out of all metals it is the easiest to chop up into fine segments. You can test relatively easily whether it is true or whether it is fake. You can take chopped up segments and you can put them back together by melting the gold. So that is what makes it a good medium of exchange and it is also a good medium of value store, because you can take it and put it in the ground and it is not going to decay like apples or steaks. The problems with traditional digital currencies on the internet is that you have to trust the mint not to print too much of it.

Yeah, to enforce scarcity, and scarcity will go up as time goes by, and what does that mean for incentives in going into the Bitcoin system. That means that you should get into the Bitcoin system now. Early. You should be an early adopter. Because your Bitcoins are going to be worth a lot of money one day. So once you have a... and the Bitcoins are just... a Bitcoin address is just a big hash. It's a hash of a public key that you generate. So once you have this hash you can just advertise it to everyone, and people can send you Bitcoins, and there is people who have set up exchanges to convert from Bitcoin to US dollars and so on. And it solves a very interesting technical problem, which is how do you stop double spending?

All digital material can be cloned, almost zero costs, so if you have currency as a digital string of numbers, how do you stop me... I want to buy this piece of pasta.
[JA using lunch table objects]

JA
Here is my digital currency and, now I take a copy of it. And now I want to buy your bit of egg. And then you go... and now I want to buy your radish! And you go, what? I've already got that! What's going on here? There's been some fraud! So there's a synchronization problem. Who now has the coin? So there is a point to point.. a spread network with all these problems, some points of the network being faster, some points of the network being slower, multiple paths of communication, how do you solve this synchronization issue about who has the currency? And so this is to mind actually the real technical innovation for Bitcoin, it has done this using some hashtrees and then a delay time, and then CPU work has to be done in order to move one thing to another so information can't spread too fast etc. OK, so, once you have a system of currency that is easy to use like that, then you can start to use it for things that you want to be scarce. What is the example of some things that we want to be scarce? Well, domain names. Names. We want names to be scarce. We want short names to be scarce, otherwise if they are not scarce, if it doesn't take work to get them, as soon as you have a nice naming system, some arsehole is going to come along and register every short name themselves.

What are potentially good places to run an exchange? If country A would ban Bitcoin and banks refuse to deal with BTC, but country B allows it, flows of money from A to B could circumvent the ban.

I'm going to a create trading app in python. Might opensource later. I've got connections to all exchanges and will create an abstraction layer, adding some GUI fancies, storage in database, strategy layer etc. Anyone in? Then PM me.

Here is a collection of code bases and snippets.

https://bitbucket.org/nitrous/mtgox-api/overview
http://pastebin.com/aXQfULyq
https://github.com/maxme/bitcoin-arbitrage
https://github.com/viorels/mtgox-trader
https://github.com/prof7bit/goxtool (Websockets and SocketIO)

https://github.com/ezl/mtgox (2years old)
https://github.com/goncalopp/python-mtgox (API v0)

Could a group of traders with collective trust short BTCs against USD via Ripple?

According to B24's operator the German and Polish government froze the accounts. I find it somewhat unbelievable that this coincides with the engine going down, but if these were true, this would be the first government intervention AFAIK.

In the ripple wiki it says it can be used to trade between MtGox and Bitstamp. How? What I see are USD spreads of 10%.

.

Is there rough data where BTCs are distributed? I assume that exchange accounts are mostly correlated with BTC holdings. With Google trends one can see that the scope of Bitcoin has broadened in the last few months, but it's still much more searched in the West.

How can ripples be used to trade between exchanges? How do I get started?

Thanks.

Hello,

currently there are several projects underway to create exchanges. I believe it would be good to develop standard for the overview of those exchanges. The modern stock exchanges have standards for the market participants. These rules are evolving and there are many conflicting interests. If no exchange standard are developed and no oversight over the exchanges is practiced, the risk of manipulation is very great. The current major exchange, could in theory make a lot of money by manipulating the market. Shutdown of the exchange suddenly, buy very cheap. Or concrete matching rules which favor one type of order over another. I believe several major players will enter over time, although probably not the DB's, NYSE's, BAT's of the world (the current exchanges). Perhaps Bitcoin will change the exchange market, not just currencies per se.

I think it would be helpful to define new standards which can and should be implemented by the exchanges. Then the exchange is free to implement those rules. Then the community (if there is such a thing) can create some kind of control. For instance consider this: the Winklevosses have bought 10% of the whole market. One major player could corner the market. It is "just" a question of money. Currently the economic forces behind the network are not that great, as compared to "the real world". But this might change, and there are some signs for that. At the moment a lot depends on MtGox. How to build trust in the exchanges? Trust in bitcoin to some degree depends on the exchanges. And I doubt the major institutions will introduces Bitcoin, because they live from the current fiat system. One thing is certain: how all of this will play out will be fascinating to observe.

Please move in the appropriate section.

Two questions. One simple and one perhaps hard.

What happens when the total supply is reached? What is the incentive for mining after all BTC's are mined?

Supply: It is often said that BTC is valuable because it is scarce, citing the 21 m total BTC's. But each BTC can be subdivided to 1/10^6 which makes the total supply 10^6 larger. Whether one BTC equals to 1$ or 100$ or 0.00000001 BTC equals to 1$ - what's the difference? The total quantity of Satoshi's is 21 * 10^6 * 10^8 = 2.1 * 10^(15).