How can we properly decentralize exchanges?

[thejaytiesto]

After the Bitfinex debacle im very scared to have any funds in exchanges, but for traders like me, we NEED to have funds availible or you can miss good trades, there's no way around it. You need to have some liquidity in the exchange otherwise by the time you send the transaction from your wallet to the exchange you end up missing a lot of opportunities since it takes way too long to confirm and so on. Not to mention sometimes you take long positions and you can't cancel them or you'll lose them.

Bitsquare.io is not a solution since its only a marketplace, its not a proper exchange to speculate and do high volume trading getting in and out of currencies and setting and removing orders instantly like on centralized exchangers, with a proper broker, market depth graphs and so on.

So how do we do this? We can't depend on centralized exchanges forever or we'll keep seeing massive selloffs forever hindering Bitcoin's growth since there will always be thiefs as long as centralized exchangers exists where single entities carry a ton of BTC from a lot of people.

So in hell we solve this fundamental problem? Can Lightning Network channels in the future be used to assemble proper exchange replacements so I no longer have to sleep scared that the next MgGox/Mintpal/Cryptsy/Bitfinex/... is going to happen and I'll lose what I keep on the exchanges? (a small % compared to my total holdings of course, but still very annoying).

What are the solutions being considered for this? Because I hope someone is working on this.

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[OmegaStarScream]

LocalBitcoins is one solution, another solution is to use forums like HackForums , Bitcointalk & Leakforums where there is a sub-section for "currency exchange" (Unlike Bitcointalk , getting scammed in the forums I mentioned happens often).

we NEED to have funds availible or you can miss good trades, there's no way around it

We don't need to have our funds for making good trades If you ask me, because if there was dedicated well-designed P2P Decentralized exchange where all people go , It would be just a matter of few minutes till users find buyers & sellers.

I personally prefer trading while the price is stable instead of while there is "pump & dump" going on even If it means that I will miss few good trades.

[Sir Alpha_goy]

Be your own bank.

Acquire physical money and back your digital assets with physical assets.

It's called balance.

Learn about physical assets here:
https://www.youtube.com/playlist?list=PLE88E9ICdipidHkTehs1VbFzgwrq1jkUJ

Stop looking for the system to validate you and validate yourself.

The centralized exchange approach is because you are afraid of real consequences.

Stop suckling and detach.

When you breathe you inhale and exhale.

It is time to exhale on Bitcoin and inhale on physical assets.

Analog, digital, analog, digital.....

Be a good robot and start constructing the next economic paradigm soon gentlemen or your Bitcoin is about to suffer great peril.

[Shiroslullaby]

I don't know if there is any way to do this an exchange.
The whole point of the exchange is a single point where you can trade or buy currencies.
You just have to work on the security and make sure potential theif doesn't have a way to empty too much currency if they gain access to the system.

I would be very interested if someone could come up with some system where you have a "decentralized" exchange, because the point of an exchange is the exact opposite of what you are trying to accomplish.
Like you said, your only option would be to have the meeting place be centralized, but the trades be P2P.

[Hazir]

We already have decentralized bitcoin exchange it is called https://bitsquare.io/

If you are interested exactly how they achieved decentralization then here is their Whitepaper: https://bitsquare.io/bitsquare.pdf

Also you might be interested by their concept overview video: https://bitsquare.io/blog/category/video/

[OmegaStarScream]

We already have decentralized bitcoin exchange it is called https://bitsquare.io/

If you are interested exactly how they achieved decentralization then here is their Whitepaper: https://bitsquare.io/bitsquare.pdf

Also you might be interested by their concept overview video: https://bitsquare.io/blog/category/video/

In case you didn't fully read the Original post , here you go :

Bitsquare.io is not a solution since its only a marketplace, its not a proper exchange to speculate and do high volume trading getting in and out of currencies and setting and removing orders instantly like on centralized exchangers, with a proper broker, market depth graphs and so on.

[Sir Alpha_goy]

We already have decentralized bitcoin exchange it is called https://bitsquare.io/

If you are interested exactly how they achieved decentralization then here is their Whitepaper: https://bitsquare.io/bitsquare.pdf

Also you might be interested by their concept overview video: https://bitsquare.io/blog/category/video/

Does it work without the app?

You already have a decentralized bitcoin exchange.

It's called a bitcoin wallet.

You can send your bitcoin to anyone whenever you want with your wallet.

If you people actually trusted each other and stopped assigning your currency a fiat value this would work just fine.

You are all too scared to do that though.

You were all given digital gold and you allowed fiat to distort your minds.

 

[Ayers]

for the moment you can do private business with people on this forum it work well for me, especially for crypto coin but for fiat it may be a bit difficult, because many only want to use system like paypal to receive money, i think you can use localbitcoin as a decentralized exchange, they only hold your money as a escrow, so therefore they are not very different than a centralized exchange

[Cuidler]

So in hell we solve this fundamental problem? Can Lightning Network channels in the future be used to assemble proper exchange replacements so I no longer have to sleep scared that the next MgGox/Mintpal/Cryptsy/Bitfinex/... is going to happen and I'll lose what I keep on the exchanges? (a small % compared to my total holdings of course, but still very annoying).

Lightning Network channels could be usefull for decentralized crypto coin exchange, but I dont think you can actually trade fiat in trustless manner (real time and in huge volumes). Thats the problem with fiat, it has no public ledger so there is no way to prove in trustless manner fiat tansaction happened. But then, just decentralized crypto coin exchange is not much interesting, more important for people is actually fiat <=> Bitcoin exchange.

[Hellacopter]

I suggest using the bitcointalk exchange section instead using the foreign exchangers which we can't really trust for our coins and deals. Here even you can use the escrow service for exchange properly without any issue

[btcdevil]

LocalBitcoins is one solution, another solution is to use forums like HackForums , Bitcointalk & Leakforums where there is a sub-section for "currency exchange" (Unlike Bitcointalk , getting scammed in the forums I mentioned happens often).

we NEED to have funds availible or you can miss good trades, there's no way around it

We don't need to have our funds for making good trades If you ask me, because if there was dedicated well-designed P2P Decentralized exchange where all people go , It would be just a matter of few minutes till users find buyers & sellers.

I personally prefer trading while the price is stable instead of while there is "pump & dump" going on even If it means that I will miss few good trades.

I think what suggestion you are giving is for bitcoin trading, but if for Altcoin traders they have to keep bitcoin in the wallet to do trading in altcoin. for that i think localbitcoin site or any other traders site wont be able to do it. That is why i think OP wanted to know about exchanges where we can trade in all coins and they dont end up in scamming after they are getting good input of tradings.

[franky1]

the main issue is people view exchanges as the main source of value. mainly due to API's and websites making value easy to be seen by anyone.
and OTC doesnt have the same public view.

meaning its harder to see a good overview of OTC trades to gauge OTC value as a whole. without making good public displays of OTC trades it would be near impossible to move to a decentralized model, and thats even if fiat gateways made a fiat 'token' that can then be withdrawn and used in decentralized systems.
take localbitcoins.
can you see what trades are happening LIVE, can localbitcoins display what live trades are also happening on the bitcoin-otc irc.. or other otc platforms. nope nope nope

making a fiat pegged token is easy. making a orderbook that links decentralized orders publicly and LIVE while remaining decentralized is the key to shifting away from centralized exchanges

[chixka000]

This idea for me is quite hard  simply because most of the countries does not consider yet as a legal currency. China also has i think 50% pf the mining production and of course most of that mined coins will be consumed also in their place.

[Kprawn]

Any services linked to fiat are centralized and decentralized services just do not have a way around that problem. I can understand the OP's frustration, because the way trading works.. you have to

have some coins stored on these centralized exchanges to be able to profit, when opportunity presents. We always give advice to newbies to NOT store large amounts of coins on these exchanges, but

when you are a serious trader, you basically have no choice.  

[topiOleg]

but when you are a serious trader, you basically have no choice. 

Serious traders calculate profits and risks associated. If the risks associated would outweight profits, serious traders would not use such exchanges. So there is choice, but given the trading is profitable, it is worth taking the loss sometimes. Obviously, not putting all on just one exchange is example how you minimize the likelihood to lose all. Even if there is super secure exchange, the much less secure exchanges would be worth to use as well as long as there could be bigger profits possible outweighting the risks.

[pereira4]

LocalBitcoins is one solution, another solution is to use forums like HackForums , Bitcointalk & Leakforums where there is a sub-section for "currency exchange" (Unlike Bitcointalk , getting scammed in the forums I mentioned happens often).

we NEED to have funds availible or you can miss good trades, there's no way around it

We don't need to have our funds for making good trades If you ask me, because if there was dedicated well-designed P2P Decentralized exchange where all people go , It would be just a matter of few minutes till users find buyers & sellers.

I personally prefer trading while the price is stable instead of while there is "pump & dump" going on even If it means that I will miss few good trades.

Those are not solutions. What OP is talking about is a proper broker type of exchanges. There's no way that a marketplace type of exchange can replace a proper exchange. Anyone that has traded in Forex and in crypto exchanges knows the difference. We need a decentralized solution for day traders.

[phkrudoker]

I could not get how an exchange could be decentralized. It may turn back to person to person buy/sell virtually in my opinion.
OP rejects bitsquare as a marketplace and not an exchange.  I am still confused how a decentralized exchange to be implemented.

[kevpantof]

Educating the population on how bitcoin works would be the first step. I know so many people that would love to be part of the movement that helps crumble our current banking system. Informing and educating is the best course of action to achieve this.