B&C Exchange, short for ​Blocks & Chains Decentralized Exchange, aims to be the Reddit of cryptoasset exchanges – simple, reputation-based, and easily accessible to everyone regardless of geographic location.

It will be developed by the same established team that has directed Peercoin and NuBits development, a group that includes well-known cryptocurrency experts such as Jordan Lee, sigmike and eramospunk. The experienced team of over ten contributors has successfully led three prior projects (Peercoin, NuBits, NuShares) into the top twenty-five assets by market cap on coinmarketcap.com.

The Basics:

B&C Exchange will be an open-source decentralized exchange that completes cryptocurrency trades between users by utilizing multisig signers that compete for blockchain rewards based on their effectiveness and honesty. Trades will occur using real cryptocurrencies such as Bitcoin and NuBits, as opposed to artificial proxy cryptoassets like those found in Nxt or BitShares.

A web based interface that will be familiar to users of centralized cryptoasset exchanges will be offered. Unlike centralized exchange websites, exchange operators will have zero access to funds and zero responsibility for customer account information. If an exchange website disappears suddenly, a user can simply go to another site that uses the same open source exchange software, or use another application that supports B&C Exchange and continue using the same account without interruption. This is because all account information will be stored on the blockchain, as the attached design document explains.

Equity ownership in B&C Exchange will be held by users who own “BlockShares (BKS)”. Users will pay transaction fees on the exchange with “BlockCredits (BKC)”. You will not need to own BlockShares to use BlockCredits, and vice versa. Profits from the sale of BlockCredits will be returned to BlockShares holders through a Bitcoin dividend mechanism in the protocol.

B&C Exchange will be fully controlled by everyone who owns ​BlockShares. For example, BlockShares holders can set the transaction fee cost (in BlockCredits) of using B&C Exchange, the number of multi-sig signers required to successfully conduct a trade (such as 7 out of 11 or 8 out of 15), and much more. It is expected that if B&C Exchange is successful, many BlockCredits will be purchased to transact on the exchange, and thus many Bitcoin dividends would be returned to BlockShares holders as a reward for operating a safe and convenient exchange.

In contrast to centralized exchanges, B&C Exchange will have:

- Significantly less counterparty and theft risk because of the multi-sig capabilities of its design.

- Far fewer operating expenses due to the absence of costs like employee salaries, supplies, and rent.

- Lower trading fees for users if BlockShares holders choose to vote for competitive low transaction fees.

- The ability to distribute Bitcoin dividends to all BlockShares holders from profits earned, using an existing dividend protocol mechanism present in the code of NuBits and NuShares.

B&C Exchange will also use NuBits to solve a major problem faced by decentralized exchanges – the inability to use stable fiat money. NuBits have closely held a 1.00 USD peg since September of 2014 and will be offered on B&C Exchange trading pairs as a synthetic substitute for US dollars. Because NuBits is a fork of Bitcoin and Peercoin, using NuBits will be a familiar experience for Bitcoin users. Substantial liquidity will be brought to the exchange through NuBit liquidity operations that have already been established.

More detailed use cases are provided in the attached design document above.

​Funding:

The sale of undistributed BlockShares held in our possession has ended. The final total funds raised are $320,764.

The total number of BlockShares on the blockchain and in circulation is 184,765.96 as of the end of fundraising on August 31, 2015. This amount can only be changed by the 0.01 BKS minting block reward, the variable reputed signer block reward we will soon add, and BKS grants approved directly by shareholders. We do not have the ability to create any additional BKS without shareholder consensus in the protocol.

We expect the funds received will provide funding for the core implementation as well as a number of extra features or even products. While the extra features implemented should probably be decided by shareholders when the core implementation is closer to being complete, implementation of CHECKTIMELOCKVERIFY in Nu and B&C as well a utilization of it in B&C for any chains that support it, escrow capabilities and an Android app that combines a multi coin wallet with full support for B&C Exchange are likely features/products the extra funds will be dedicated to.


Summary:

We expect there will be many questions about the technical details, the proposed funding model, and our team’s prior experience. We will do our best to answer any question asked to the best of our abilities. Lead architect Jordan Lee will also be active in this thread to answer questions as they arise.

We believe the design of B&C Exchange will allow users to safely control - and earn dividends from - their own cryptoasset trades. It is the beginning of a future without centralized exchanges.

I'm looking forward to addressing concerns and questions forum participants will have.

I'm also available at jlee@vistomail.com and the Bitmessage address in my signature.

I really like the project outlined above and am willing to invest some money (although already holding Nushares). I already raised the question on discuss.nubits.com regarding sigmike's role for other projects. I like the work you guys perform but I am not willing to fund projects if the knowledge and experience you guys gain during building such an exchange will be passed along to the next project outside of the Nu network. If the Nu network pays for the development, they must have the exclusive ownership of the achievements of such a project.

While it is expected that the B&C Exchange will be open source (unless NuShare holders indicate they have other preferences), let's consider what would happen if someone created a clone of B&C Exchange.

Liquidity is of paramount importance for an exchange. Liquidity tends to have feedback loops associated with it. High liquidity attracts more market participants due to superior pricing, creating even more liquidity. Low liquidity simply encourages market participants to go elsewhere.

The original B&C Exchange will have a remarkable liquidity advantage because Nu, which is in the business of providing liquidity to stable cryptocurrency, will bring liquidity to it through its already established liquidity operations. Nu will do so because of the high degree of overlap in shareholder ownership and because B&C Exchange will be the cheapest place to provide NuBit liquidity due to its dramatically reduced risk of exchange default and theft. Nu is unlikely to provide any liquidity at all to clones of B&C Exchange because it will be against the interest of BlockShare holders to do so, and most BlockShare holders will also be NuShare holders.

If your concern about contributors such as sigmike not doing work for other projects is shared by other shareholders, then it is possible for shareholders to negotiate non-compete agreements with contributors. sigmike already has a non-compete agreement that covers stable value cryptocurrencies, so it is possible to negotiate expanding this to trading platforms. However, limiting contributor opportunities will typically require some compensation for that.

If I own nushares and dont participate on the auction, will I still get blockshares?

What's the difference/advantage between already owning nushares or bidding them? Trying to get cheaper blockshares (assuming they're less than 0.033 - same price as nushares like you mentioned)?

is the supply of blockshares fixed or can it increase? Will this be decided through voting?

The crypto-communities suffered too much in losses due to stolen funds, and it is good to see project like this emerging.  Looking forward to learn more.

If you hold 1/900th of all BlockShares, you will receive 1/900th of all Bitcoin dividends (this will be very slightly skewed by the fact that some of the dividend will be used to pay Bitcoin transaction fees to transfer the dividends and nothing will be sent to BlockShare owners that would receive less than the Bitcoin transaction fee).

Dividends are not tied directly to transaction fees. Rather, they are tied to the number of BlockCredits sold (which can only be used to pay for transaction fees).


This is an important question, and one I would like to know the answer to as well. Development of an unprecedented software solution such as B&C Exchange is characterized by the unfolding of unexpected issues which must be solved.

I have delivered an unprecedented blockchain solution in the past in the form of the Nu network, which pioneered stable cryptocurrency and the ability of shareholders to constantly adjust the protocol by voting. The network worked just as promised and was delivered in 8 months at a cost of around 250,000 USD. While I made no promises about the time it would take to deliver Nu, I will report that I privately thought it would take 6 months and 500,000 USD. So, I was 50% under budget and 33% over my private time estimate.

I can say that I believe B&C Exchange is modestly or slightly simpler than creating the Peershare template and Nu. I am absolutely committed to doing everything in my power to delivering it as quickly as possible. However, investors should be aware that I am unable to absolutely guarantee its delivery at all, and I can't guarantee it will be delivered in a certain time frame or for a certain cost.

Mr Lee:
1. how do they plan to prevent someone from flooding the system with (matched) orders and not following through with the actual coin transfers?

2. is  reputation based on votes by the coin holders the best one in your opinion?

3. What are your reasons to have a separate token for transaction fees. why not the native token in the system?

The following questions were asked here:
https://discuss.nubits.com/t/draft-motion-to-provide-seed-funding-for-b-c-exchange-a-decentralized-exchange-built-on-the-peershares-platform/2001/19


It is my expectation that Nu client 2.0 development of our shareholder approved protocol changes will be completed prior to the conclusion of the auction.

I'm confident the development of B&C Exchange will benefit Nu and NuShare holders more than any other additional development that has been discussed. Therefore, it is the proper priority for Nu development. The chance of B&C Exchange succeeding is tremendously enhanced by employing a proven team that is already working together successfully.

NuBot will be critical to the success of B&C Exchange, as it will be the method for establishing liquidity on it. The parametric order book feature that is the most important NuBot road map item is extremely important for providing liquidity on B&C Exchange to pairs other than BTC/NBT, such as LTC/NBT, Dogecoin/NBT, NSR/NBT, etc. Also, NuBot will need to be modified to work with B&C Exchange.

So, in summary, after the Nu 2.0 release, I believe the priorities of the core development team and the NuBot team should be B&C Exchange related development.

Of course I believe this NuShare dilution will increase the value of NuShares, as all dilutions should. However, the market will have to decide that and other factors such as the overall course of cryptoassets will weigh heavily on the NuShare price.

The second post in this thread addresses your last question.

Once funds have been transferred under the distributed control of reputed multisig signers, orders must be validated by enough signers to transfer funds plus two backup signers to be regarded as valid by the protocol. The potential exploit of placing two orders simultaneously to consume the same funds is really just a double spend. This problem has been famously solved by Bitcoin, and we will use the exact same proven solution in B&C Exchange. Orders must have a certain number of confirmations (this number is dynamically configurable through shareholder voting) to ensure this type of double spend has not occurred.


Yes. There are schemes I considered that reward signers for actual work or signings but these are all significantly more complicated and subject to various kinds of gaming. Simplicity is really compelling in a consensus protocol. It is expected some shareholders will be tempted to upvote their own address to receive a reward without performing any work. Reputed multisig signers will need to make public appeals to the community to explain why they should selected to sign. This means that any mystery addresses that are receiving upvotes should be downvoted by all other shareholders. A mystery address receiving its first malicious upvotes will not be trusted with signing because only top rated addresses can do that (the number of top rated signers permitted is also dynamically configured via shareholder voting), and it will take quite a bit of time to get to the top. While this is quite a bit to keep up with, it is expected that most shareholders will use a data feed to delegate their vote to someone who is watching closely that they choose to trust. Data feeds have already proven to work well in Nu. Shareholders have proven incredibly responsive in dealing with emerging conditions in the Nu network.


Actually, using BlockShares was my initial choice in my first draft, so I can relate to that inclination. Tom Joad suggested using a separate token. The main advantage to this is stable value, so that the cost of transactions will be stable even as the BlockShare price experiences volatility. This is very easy to implement because within the code base BlockCredits equate to NuBits while BlockShares equate to NuShares. Almost all the needed code is already there.