**MANDATORY UPGRADE REQUIRED** [ANN] B&C Exchange - All users must upgrade

[fatbitcoinfan]

Another set of additional questions, if you do not mind:

- What would be the main difference between B&C and a smart contract-based decentralized exchange if ever the latter is possible?

The latter wouldn't need the trusted signers. That would remove the need for a lot of B&C's infrastructure. There'd be no nominations or voting and you wouldn't even need shares or dividends. It could be done without a fee, apart from the coin transaction fees. There'd be no exchange operators, so there'd be no opportunity to make a business out of creating and running it.

- Can we increase easily the number of signers required and number of signers? Currently designed I understand that it is  8 out of 15. Any particular reason for this pair?

Somebody correct me if I'm wrong, but I think that bitcoin and its clones won't allow you to have messages longer than a certain size when you want to spend a coin. If the coin is in a multisig address, you need lots of signatures to be able to spend it but then you hit the size limit. I think 8 out of 15 is pretty much as large as you can get.

- How could a trusted signer increase the speed of signing a deposit request message if he or she wanted to?

Not using Tor would do the trick.

[JordanLee]

It has already been pointed out that transaction malleability is a problem for Mercury's approach. It is also important that no one has a financial stake in promoting Mercury and that NuBit shareholders will provide deep liquidity on B&C Exchange but don't have the same incentives to support Mercury. I hope to have time to provide a detailed comparison of Mercury and B&C Exchange. Briefly, Mercury is an important and noble project but it doesn't have the same prospects for widespread adoption and commercial success as B&C Exchange.

I know you're confident but being humble is good too. How do you know Mercury doesn't have the same prospects for widespread adoption or commercial success as B & C? They have a simpler exchange algorithm than you do and their software is already functional, plus - they charge zero trade fees. I wouldn't be so quick to dismiss your competition even if you do seem to have a better incentivisation model. (They have also already fixed the TX malleability issue I raised with a temporary multi-signature approach not unlike your own.)

I hadn't realized Mercury is using multi-sig now. Thanks for bringing me up to date.

I like Mercury and Mappum and hope they succeed. Having a variety of decentralized exchanges will make the peer to peer economy stronger than having a just a single solution. Our primary competitors are centralized exchanges. Unlike Mercury, I do hope that centralized exchanges become viewed as obsolete and are abandoned soon. Their failures have been very hard on the peer to peer economy. Mercury and B&C Exchange can both play a role in ending those failures.

However, Mercury requires users to run the Mercury desktop client and a variety of other coin daemons or clients. B&C Exchange will provide a convenient web based user experience quite similar to what users are used to at centralized exchanges.

Liquidity is the lifeblood of an exchange. Given the broad overlap of NuShare and BlockShare holders, we can be sure NuShare holders will favor providing liquidity on B&C Exchange over other exchanges, including Mercury. The liquidity provided by NuBot and the Nu network will be key to the success of B&C Exchange.

[JordanLee]

An anonymous donor who is a friend of B&C Exchange is offering a 2 million NSR reward (currently valued at $5600) for whoever places the largest successful bid (as measured in USD or NuBits) in the auction that ends on the 12th. "Successful bid" means the auction meets its minimum funding goal of 200,000 USD, the bid is at a winning price, and payment for NuShares is made.

Thank you to the donor behind this offer.

[Sentinelrv]

BCExchange, Pillow from Peercointalk said in chat that he sent a Bitmessage but never received a response. Is there any chance one of your messages got overlooked? I told him to try resending his request and that I'd let you know about it here.

[BCExchange]

BCExchange, Pillow from Peercointalk said in chat that he sent a Bitmessage but never received a response. Is there any chance one of your messages got overlooked? I told him to try resending his request and that I'd let you know about it here.

This is the first report we have received of unresponsiveness. No Bitmessage has been received from Pillow, unfortunately. All Bitmessages received at BM-2cTihATJ5FwJ7vWBwZmJjr55eFPFWBCmCQ and emails received at nsrauction@vistomail.com have been given prompt replies.

I would suggest Pillow resend. Email is more reliable, but Bitmessage is very likely to work as well.

[BCExchange]

There are now 4 days left in the auction. Thank you to everyone who has placed a bid! As a reminder, no late bids will be accepted past the deadline, so please submit them as early as possible.

[cybnate26]

This has actually been an excellent discussion and I've learned a lot. I kind of want to keep this going now but I feel like I'm hijacking your thread. Do you guys mind if I post some more questions I might have tomorrow?

Have been lurking here for a while. Definitely enjoyed the discussion. Like to see more of it.

Have been following the Mercury developments from the start. The B&C development is also very interesting and is a bold attempt to run a decentralized exchange as a business.
In general, anything that removes the reliance on centralized exchanges, one of the last bastions of centralization in the crypto world, has my support. The sooner the better!

[cryptog1]

Another set of additional questions, if you do not mind:

- What would be the main difference between B&C and a smart contract-based decentralized exchange if ever the latter is possible?

The latter wouldn't need the trusted signers. That would remove the need for a lot of B&C's infrastructure. There'd be no nominations or voting and you wouldn't even need shares or dividends. It could be done without a fee, apart from the coin transaction fees. There'd be no exchange operators, so there'd be no opportunity to make a business out of creating and running it.

- Can we increase easily the number of signers required and number of signers? Currently designed I understand that it is  8 out of 15. Any particular reason for this pair?

Somebody correct me if I'm wrong, but I think that bitcoin and its clones won't allow you to have messages longer than a certain size when you want to spend a coin. If the coin is in a multisig address, you need lots of signatures to be able to spend it but then you hit the size limit. I think 8 out of 15 is pretty much as large as you can get.

- How could a trusted signer increase the speed of signing a deposit request message if he or she wanted to?

Not using Tor would do the trick.

tks.

[JordanLee]

Another set of additional questions, if you do not mind:

- What would be the main difference between B&C and a smart contract-based decentralized exchange if ever the latter is possible?

The latter wouldn't need the trusted signers. That would remove the need for a lot of B&C's infrastructure. There'd be no nominations or voting and you wouldn't even need shares or dividends. It could be done without a fee, apart from the coin transaction fees. There'd be no exchange operators, so there'd be no opportunity to make a business out of creating and running it.

The answer to cryptog1's question depends on how you define "smart contract". If you define a smart contract as something that occurs on a single blockchain without any external dependencies, then smart contracts could never be used to create a decentralized exchange that trades assets on foreign blockchains. If you define smart contracts in a way that permits consideration of events beyond the native blockchain, then the exchange agreements crafted on B&C constitute smart contracts. My understanding of the essence of smart contracts is that their terms, execution and outcome are automated using a blockchain. Using this definition orders placed and filled on B&C Exchange are certainly smart contracts.

[cryptog1]

whoever places the largest successful bid (as measured in USD or NuBits) in the auction that ends on the 12th. "Successful bid" means the auction

Just for clarifying. Here largest bid means (price * number of shares) assuming the bid matches the auction conditions ?

The answer to cryptog1's question depends on how you define "smart contract". If you define a smart contract as something that occurs on a single blockchain without any external dependencies, then smart contracts could never be used to create a decentralized exchange that trades assets on foreign blockchains. If you define smart contracts in a way that permits consideration of events beyond the native blockchain, then the exchange agreements crafted on B&C constitute smart contracts. My understanding of the essence of smart contracts is that their terms, execution and outcome are automated using a blockchain. Using this definition orders placed and filled on B&C Exchange are certainly smart contracts.

Tks a lot for this clarification. This is exactly the answer I was expecting.  More generally, I do think that "smart contracts" are rather a buzz word that just expresses in a fancy way some scripts that are executed in a trustless way within the blockchain so in this sense Nu has smart contracts and b&c would certainly too.

[fatbitcoinfan]

My understanding of the essence of smart contracts is that their terms, execution and outcome are automated using a blockchain. Using this definition orders placed and filled on B&C Exchange are certainly smart contracts.

Tks a lot for this clarification. This is exactly the answer I was expecting.  More generally, I do think that "smart contracts" are rather a buzz word that just expresses in a fancy way some scripts that are executed in a trustless way within the blockchain so in this sense Nu has smart contracts and b&c would certainly too.

This is a bit that I don't fully understand: If you can execute contracts or scripts on the blockchain trustlessly, then why don't you get these trustless scripts to do the signing, instead of choosing 15 people to trust?

The people just turn on some software and then go away, and we trust them not to modify the software maliciously. So why not have the code to be executed be the trustless type, like the code that checks the signatures in bitcoin transactions?

[JordanLee]

whoever places the largest successful bid (as measured in USD or NuBits) in the auction that ends on the 12th. "Successful bid" means the auction

Just for clarifying. Here largest bid means (price * number of shares) assuming the bid matches the auction conditions ?

Yes, that is correct.

[JordanLee]

This is a bit that I don't fully understand: If you can execute contracts or scripts on the blockchain trustlessly, then why don't you get these trustless scripts to do the signing, instead of choosing 15 people to trust?

The people just turn on some software and then go away, and we trust them not to modify the software maliciously. So why not have the code to be executed be the trustless type, like the code that checks the signatures in bitcoin transactions?

The need for reputed signers revolves around the need for management of private keys used to sign multisig transactions transferring funds from deposit addresses. The private keys must be kept from everyone but the signer, and they must also make them available to a client under their control to sign transfers.

These signers do just turn on software and go away. Everything is done automatically for them. Signing operations will typically take place on Linux VPSs that won't be logged into for weeks at a time in many cases.

[mhps]

I'm not sure I understand why shareholders might want the security deposit asset to be the same as the signing asset. It is also likely that most reputed signers will sign for many asset types.

I agree that many reputed signers may want to sign for many asset types. The reason why the deposit should be the signing asset is that the B&C traders of those assets may want to be sure that the signer has deposit that reach a certain amount all the time, in terms of the singing asset. For example if there are $20k depoisit in Blockshares in the beginning for signing LTC/BTC and someone dumps a couple of blockshare when blockshare market is as shallow as current NSR's, and cause the price of blockshares (in BTC) to drop by 50%. Then the deposit is worth $10k, causing B&C traders to switch away from this signer.

In short, my point is that the B&C users would want collaterals (deposit) and the collaterals may translate into operational cost.

[BCExchange]

There are now 3 days left in the auction. Thank you to everyone who has placed a bid! As a reminder, no late bids will be accepted past the deadline, so please submit them as early as possible.

[jubalix]

can someone explain who is the holder of all these off market nushares???

is this a sort of dump int btc for large nushare holders ala mastercoin into maidsafe at the expense of BTC?

[JordanLee]

can someone explain who is the holder of all these off market nushares???

is this a sort of dump int btc for large nushare holders ala mastercoin into maidsafe at the expense of BTC?

The NuShares up for auction are not owned by anyone, and never have been. They were created last August for the purpose of selling when our blockchain was first created last August.

B&C Exchange will provide additional value to Bitcoin because it will permit Bitcoins to be bought and sold in a very secure and private manner. I'm surprised to see the question raised about this being detrimental to Bitcoin.

[JordanLee]

- Can we increase easily the number of signers required and number of signers? Currently designed I understand that it is  8 out of 15. Any particular reason for this pair?

The system isn't designed specifically for 8 of 15, but it can support that and I have used it in examples. Shareholders can change the number of total signers and the number of signers required by voting for the number they think is best; no code changes are needed and it can be changed at anytime. The minimum number of required signers is 2 while the maximum is 13. The minimum number of total signers is 4 and the maximum is 15. 8 of 15 is just a guess of where we will end up, but experience will give us a lot more information about what the optimal values are. It is unlikely there will be that many signers right when B&C Exchange begins operation.

- How could a trusted signer increase the speed of signing a deposit request message if he or she wanted to?

Principally by not using Tor and other proxies such as VPNs. I suspect shareholders will prefer the added security of proxies over the speed of not using them, at least in the early days before more sophisticated solutions are crafted. Proxies obscure the signer's IP address, which basically means there is zero attack surface because no one has any idea how to communicate directly with signers. All communication occurs via general network broadcast. It is a very secure architecture, especially when compared to centralized exchanges that have considerable attack surfaces to protect.

[JordanLee]

Fees for B&C Exchange are set by shareholders by voting and can be changed whenever shareholders choose to do so. The fee is not a percent like with centralized exchanges, but rather an amount per byte of blockchain space required. The fees to open an account will vary based on the number of deposit addresses used and the number of signers used, but it might average several times the cost of an order.

What do you think is the best price to charge for the average size order to meet the goal of maximizing exchange revenue? When I speak of the size of the order, I'm referring to the number of bytes it requires on the blockchain. The monetary value of the order is not relevant in regard to the transaction fee.

[BCExchange]

Thank you to everyone who has participated in this thread so far! We appreciate the thoughtful questions and comments.