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Author Topic: Decentralized BTC Stock Market [Goodbye GLBSE]  (Read 15824 times)
killerstorm
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November 09, 2012, 03:48:19 PM
 #121

but where is the asset holders information stored, after the trades is cleared (transfer/payment).

The right answer is "in blockchain", obviously. That's the only way to make it secure and decentralized.

Think about it: if there was a way to store ownership information without blockchain, we would have cryptocurrencies other than Bitcoin.

There might be a way to secure transactions without proof-of-work, e.g. Ben Laurie's "mintettes": http://www.links.org/files/distributed-currency.pdf

But since we already have PoW-secured Bitcoin, it just makes sense to use same PoW to secure asset transactions. Either via merged mining, or via embedding information right into Bitcoin blockchain.

colored coins proof-of-concept: private currencies, stock/bond p2p exchange

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yoniassia
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November 09, 2012, 10:26:32 PM
 #122


Awesome picture, fits colorded bitcoins very well
EskimoBob
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November 10, 2012, 11:19:18 AM
 #123

but where is the asset holders information stored, after the trades is cleared (transfer/payment).

The right answer is "in blockchain", obviously. That's the only way to make it secure and decentralized.

Think about it: if there was a way to store ownership information without blockchain, we would have cryptocurrencies other than Bitcoin.

There might be a way to secure transactions without proof-of-work, e.g. Ben Laurie's "mintettes": http://www.links.org/files/distributed-currency.pdf

But since we already have PoW-secured Bitcoin, it just makes sense to use same PoW to secure asset transactions. Either via merged mining, or via embedding information right into Bitcoin blockchain.

I think that inventing and building a decentralized exchange with all the required parts is one of the coolest projects in the *coin world at the moment.
OT (OpenTransactions) guys have also done a massive amount of work and if those 2 projects/ideas can somehow be integrated... wow. Honestly, this stuff is exiting.

One thing that bothers me about the BTC type of blockchains is the ever growing size and it's vulnerability to 51% attacks. Also, lets not forget the huge cost (power) to keep it healthy and protected from all sorts of scumbags and losers with serious mental issues. BTC difficulty has soared to the level where small scale mining has become a pointless waste of time and looks like ASIC's will not help in this department. BTC mining will (has) become highly specialized business and this is probably not good at all. Concentration of power in to the hands of few greedy megalomaniacs and we go back to the "world" that BTC was built to avoid - money printing "fed" and it's greedy sock puppet "banks", who can remove you from the picture by a flip of a switch.

Sorry, I did not read the whole thread so it's a bit unclear how do the securities get issued. Second issue is "why keep mining". How is "mining" this stuff made financially attractive?

While reading what I wrote, use the most friendliest and relaxing voice in your head.
BTW, Things in BTC bubble universes are getting ugly....
killerstorm
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November 10, 2012, 04:35:08 PM
 #124

Well, colored coins kinda solve mining issue: we just use existing blockchain, assuming that it's already secure.

People need to purchase coins to turn them into asset-representing tokens, and also they need to pay txn fees. That's how miners are compensated.

If we'll have a blockchain specifically for asset ownership tracking (e.g. ripplecoin), we'll have "host coins" which are awarded to miners, while asset issuers have their own tokens which are created as needed. You need to pay hostcoins as a transaction fees, so that's how miners get compensated.

Quote
Sorry, I did not read the whole thread so it's a bit unclear how do the securities get issued.

You send coins to yourself, then create a "color definitions" which says what they mean, i.e. it can point to a contract.

colored coins proof-of-concept: private currencies, stock/bond p2p exchange

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jtimon
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November 11, 2012, 12:13:30 PM
 #125

@EskimoBob
Just to clarify, in case you're asking what the holder needs demonstrates that he owns the asset.

1) You need the issuance transaction that killerstorm explained. The issuer can also provide it outside the chain protocol to the potential buyers (through an advertisement service or another p2p protocol based on IRC, Tor or whatever), probably signed with additional information (like what the token means, maybe a legal contract also signed with a legally binding digital signature).

2) You need the chain from the moment of issuance. If blocks were Merkle trees where leafs are transactions (the chain is a Merkle tree where leafs are blocks), you could prone much and keep only the transactions that trace your purchase back to the issuance transaction.
I have no idea if this is the "ultra-prune" that I've read of on the mailing list, which will get into the bitcoin reference implementation 0.8 or 0.9.

About combining OT and bitcoin... maaku (our great freicoin developer) is drafting some designs on an OTcoin. Basically all miners act as one and the same OT server that processes and validates transactions. It's feasible and it could easily implement ripple (it's only one server, the problem was ripple across OT servers). I still think the "untraceable" "cash" instrument is useless though.

2 different forms of free-money: Freicoin (free of basic interest because it's perishable), Mutual credit (no interest because it's abundant)
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