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Author Topic: Not so "decentralized" currency...  (Read 1575 times)
piramida
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April 03, 2013, 03:14:18 PM
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OK, good. But how does bitpay sell their coins? I assume they have a variety of ways, but isn't Gox one of the major ways? I don't think bitcoin is somehow centralized because of Gox, but I do think Gox is relied on too heavily, even if it is just for trading and not any merchant activity. Sort of reminds me of deepbit back in the day when it was much larger than any other pool (even though IMO it wasn't the best pool). 

Gox has the largest volume, hard to argue, but the argument was about your invalid point that "merchants who need an exchange rate to price goods and services in BTC". Just saying that merchants have a perfect way to be completely shielded against any exchange rate or ddos or other similar growth perturbations.

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Dargo
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April 03, 2013, 03:24:45 PM
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OK, good. But how does bitpay sell their coins? I assume they have a variety of ways, but isn't Gox one of the major ways? I don't think bitcoin is somehow centralized because of Gox, but I do think Gox is relied on too heavily, even if it is just for trading and not any merchant activity. Sort of reminds me of deepbit back in the day when it was much larger than any other pool (even though IMO it wasn't the best pool). 

Gox has the largest volume, hard to argue, but the argument was about your invalid point that "merchants who need an exchange rate to price goods and services in BTC". Just saying that merchants have a perfect way to be completely shielded against any exchange rate or ddos or other similar growth perturbations.

Fair enough. Merchants using a service like bitpay don't need an exchange rate directly, but a service like bitpay does need an exchange rate. Even if they sell coins directly to buyers, they need some way of knowing whether the price is fair in terms of the going rate. And I have trouble believing that to have the largest exchange with the best liquidity go down completely, or lag so badly one effectively can't trade, doesn't pose some difficulty for this.
piramida
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April 03, 2013, 04:03:31 PM
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Maybe they (bitpay) even had some losses; but it's their problem to figure out at what price they can sell the coins and which exchanges to use; I'm pretty sure they don't just rely on gox Smiley So whatever we discuss here, large businesses like bitpay will figure out a fallback options, don't worry. You make it sound as if when gox goes down bitcoin economy stops - it does not, that's all I wanted to point out Smiley

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April 03, 2013, 05:22:50 PM
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Maybe they (bitpay) even had some losses; but it's their problem to figure out at what price they can sell the coins and which exchanges to use; I'm pretty sure they don't just rely on gox Smiley So whatever we discuss here, large businesses like bitpay will figure out a fallback options, don't worry. You make it sound as if when gox goes down bitcoin economy stops - it does not, that's all I wanted to point out Smiley

Oh, sorry, that's not what I intended to convey, but I can see how you got that impression. And I should have considered that all/most merchants are insulated from exchange rates to a large extent by using bitpay (or similar - not sure how many options there are here). I'm not worried, but I do think that Gox in its current state is a point of weakness. It has liquidity, but can't handle volume. That will hopefully be changing soon though. It's also unfortunate that a DDOS attack can be used to manipulate price (though in this case it may not have been entirely bad since we probably needed something to stem the madness, even if briefly). It would be better to have many exchanges with deep liquidity and capacity for volume though, and again I see this as something that will come with time. A stronger exchange network is IMO one of the prerequisites for BTC to grow into a major worldwide medium of commerce, and one that (based merely on my sporadic reading around the forum) doesn't get discussed enough. But this will have to come along with BTC growth, and there will be bumps along the way. But fundamentally I'm very bullish on BTC and the economy it is enabling, and there's no way a little glitch like this can shake that. 
piramida
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April 03, 2013, 06:16:42 PM
 #25

Gox has been a problem for several years and everybody knows that; I personally would love to see a true p2p/web of trust decentralized exchange like bitcoin-OTC only easy to use for the layman; but this is a hard problem and while it's not solved we can use many exchanges with varying degrees of crapiness, Gox being the biggest now.

In either case, these speculative exchanges are temporary measure and not really needed in the end, if there are Bitcoin ATMs for us to buy/sell coins for local currencies. All that needs to happen is for bitcoin to be  (behind the curtains) added to the bank exchange system and become one of the world's hard currencies, to be tradeable on existing forex systems and interbank. Meanwhile, use whichever exchange suits you better and don't worry about merchants, they are covered Smiley

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April 03, 2013, 06:18:44 PM
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Bitfloor works like a charm.
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April 03, 2013, 06:48:18 PM
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Gox has been a problem for several years and everybody knows that; I personally would love to see a true p2p/web of trust decentralized exchange like bitcoin-OTC only easy to use for the layman; but this is a hard problem and while it's not solved we can use many exchanges with varying degrees of crapiness, Gox being the biggest now.

In either case, these speculative exchanges are temporary measure and not really needed in the end, if there are Bitcoin ATMs for us to buy/sell coins for local currencies. All that needs to happen is for bitcoin to be  (behind the curtains) added to the bank exchange system and become one of the world's hard currencies, to be tradeable on existing forex systems and interbank. Meanwhile, use whichever exchange suits you better and don't worry about merchants, they are covered Smiley

Yep, I agree on all points.
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