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Author Topic: Put the Gox Down and Step Away. Ideas: How to make a Pro BTC Exchange  (Read 1834 times)
Grover
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April 13, 2013, 01:06:40 AM
 #1

Let's discuss and brain storm on how to replace Gox.

My idea is that a crowd sourced exchange is created.  The exchange is non-profit esque in that fees would be for pure overhead of reasonable and not necessarily customary expenses and compensation.  This exchange would not remove profit motive at all, it would shift profit motive from the owners of the exchange to the BTC community.

This exchange exists only to serve BTC and provide liquidity.  It will be open source and there will be no dark trades. Bots will be allowed, but not allowed to flood orders and set artificial  prices by buying some BTC then filling in the bids with a ton of small orders to reach the new ask, and vice-versa.

There is more than enough bonafide real world talent on this forum to pull this off.  It may take a year to get it going and up to speed, but I think the long term payoff for everyone in the BTC community makes this worth while.

Imagine an exchange that does not exist to make the exchange's owners rich, and an exchange that is answerable directly to the many shareholders?  You can't can you?  Try again and you can imagine a post Gox BTC world.

There would be a minimum of 1-2 BTC per individual to fund the development and receive a vote.  Every shareholder receives 1 vote regardless how much is paid for a voting position.

I know it's all whack.  I mean that if someone decides to put in 200BTC worth that they still get 1 vote.  I say this is Democratic in the sense that the person who can put in 200 BTC is more in a position to benefit from this exchange and in turn must be beholden to the alleged intended ideals of BTC as I understand them from reading on this forum. (Believe me this is difficult for me to write and mean since IRL I'm all about moral hazard and very pro you get equal consideration for compensation. But this is allegedly not what BTC is founded on. Problem with that is that era is gone for now and wide acceptance of BTC by the world requires a modicum of stability.  Beggars can be choosers depending on who they vote for.)

The exchange would have a board of directors who are voted in by the shareholders.  The board elects all other positions.  Board members have rights to remove any position according to Robert's Rules to order.  Terms are two years, and have a two term limit. Shareholders have recall rights as long as a supermajority over at least 60%, level TBD, gives a member a vote of no confidence.

I know this is not a complete plan, merely a brainstorm of mine to try and get a ball rolling and hopefully get more minds involved with removing the Gox from the ass that they are turning BTC into.  Gox and all other private, dark exchanges must go if BTC is to truly realize what it's alleged to be and that is a decentralized commodity.


Please if you have another idea on how to accomplish a paradigm shift from Gox and the privately held dark exchanges, such as Gox then post them, or expound on what I've written or tear it to shreds. If you decide to tear it to shreds then back up your claims with a better idea/solution.


edited, added sentences 3,4 in paragraph 8.
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April 13, 2013, 01:09:44 AM
 #2

We should just put our resources to developing an opensource exchange framework, then release it.  Exchanges will popup, with different rules, fees, etc.  The best will be used, the rest will crumble.
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April 13, 2013, 01:21:21 AM
 #3

These are also topics on decentralizing trades from Mt.Gox:

https://bitcointalk.org/index.php?topic=172705.0
https://bitcointalk.org/index.php?topic=174950.0
https://bitcointalk.org/index.php?topic=174959.0

It's a genuine problem.
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April 13, 2013, 01:26:12 AM
 #4

We should just put our resources to developing an opensource exchange framework, then release it.  Exchanges will popup, with different rules, fees, etc.  The best will be used, the rest will crumble.

Very good idea.  I'm not trying to argue, merely play some devil's advocate.

How would this stop any one closely held exchange possibly taking over BTC and holding the entire community hostage to their ineptness and greed in the form of any deals they make with entities known and unknown to provide services? 

Gox is the prime example in that they sold to ConLab [CoinLab] when ConLab has ZERO experience in running an exchange, they stumbled upon the idea/opportunity and got the VC funding to make it happen.

So basically the fate of BTC has just been sold to the very posers that be, that the BTC community seems to think they're fighting.  It makes zero sense to me, other than the veil of pure avarice and greed has covered the eyes of a great many early adopters of BTC since they're now getting fiat bank.

Don't get me wrong I understand BTC is purely a means by which to gain fiat while bemoaning fiat as a bastard child.  If the BTC community was above fiat then there would be zero fiat exchanges.
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April 13, 2013, 01:32:50 AM
 #5

Open Transactions Server:

https://github.com/FellowTraveler/Open-Transactions/wiki

fellowtraveller is a longtime poster on the forum
markm is a big proponent
da2ce7 ditto

https://bitcointalk.org/index.php?topic=53329.0
early talks and:

https://bitcointalk.org/index.php?topic=117080.0
active server details!

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April 13, 2013, 01:33:25 AM
 #6

Make a startup called 'Secure bitcoin holdings'. You make a pool of offline coins and use multisig for secure transactions.

Now approach every single existing Forex trading company. You become their 'banking' partner for bitcoins. When customer pays into your cold wallet, your software notifies the FX company how many funds to credit internally in their exchange.

FX company goes into settings, activates 'BTC' alongside USD, EUR, CAD ect. Trading happens as usual using the professional FX trading engine and infrastructure.

When customer withdraws, instead of asking the bank to send a wire they ask you to send the coins. Let them handle the fiat side of things they just need a competent non clownshoes operation with funding for insurance that can handle the bitcoin transactions.

Now professional trading is available. Big traders on these forex sites can now decentralize to trade locally for cash and other instruments. For instance I would pay in $100,000 sitting on the exchange in fiat waiting to trade.
I would sell bitcoins out of a store and if I needed more coins, do a trade and withdraw to customer using the FX company.



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April 13, 2013, 01:33:29 AM
 #7



I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.
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April 13, 2013, 01:38:47 AM
 #8



I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.

I actually haven't had time to read through the first two links. The last thread is mine (someone posted the other links in my thread) for a much simpler idea: the community supports existing exchanges more.
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April 13, 2013, 01:43:27 AM
 #9

...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.
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April 13, 2013, 01:48:49 AM
 #10

...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.

I pretty much agree and a multitude will pop up as time goes on.

The problem is right now of all exchanges in existence, and there are many, Mt.Gox has about 80% of all trade volume by themselves. As Bitcoin grows, and it has been doing so exponentially, so will the magnitude of Mt.Gox's top heavy share of trade.

That's why they got over loaded - their press release even says so - and why I think the solution is supporting and recommending other exchanges now.
Grover
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April 13, 2013, 01:57:55 AM
 #11

...

You are not solving anything (replacing one exchange, MtGox, with another).

What Bitcoin needs is a multitude of exchanges to pop up across the world, to spread load, users, trades, DDoS, infrastructure, etc.

I pretty much agree and a multitude will pop up as time goes on.

The problem is right now of all exchanges in existence, and there are many, Mt.Gox has about 80% of all trade volume by themselves. As Bitcoin grows, and it has been doing so exponentially, so will the magnitude of Mt.Gox's top heavy share of trade.

That's why they got over loaded - their press release even says so - and why I think the solution is supporting and recommending other exchanges now.

Seems to me that so far exploiting the arbitrage possibilities between exchanges is a real issue in that not all exchanges are equal in regards to the ability to withdraw fiat.

This FX based idea has a lot of merit.

Make a startup called 'Secure bitcoin holdings'. You make a pool of offline coins and use multisig for secure transactions.

Now approach every single existing Forex trading company. You become their 'banking' partner for bitcoins. When customer pays into your cold wallet, your software notifies the FX company how many funds to credit internally in their exchange.

FX company goes into settings, activates 'BTC' alongside USD, EUR, CAD ect. Trading happens as usual using the professional FX trading engine and infrastructure.

When customer withdraws, instead of asking the bank to send a wire they ask you to send the coins. Let them handle the fiat side of things they just need a competent non clownshoes operation with funding for insurance that can handle the bitcoin transactions.

Now professional trading is available. Big traders on these forex sites can now decentralize to trade locally for cash and other instruments. For instance I would pay in $100,000 sitting on the exchange in fiat waiting to trade.
I would sell bitcoins out of a store and if I needed more coins, do a trade and withdraw to customer using the FX company.
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April 13, 2013, 02:37:33 AM
 #12

Wouldn't an exchange such as the Silk Road work?

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April 13, 2013, 02:45:27 AM
 #13

Wouldn't an exchange such as the Silk Road work?

That's a black market, not an exchange...


(Drugs are fun to try though..)

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April 13, 2013, 12:32:51 PM
 #14



I agree a pure P2P system is the nirvana, but how do you transfer the other item for trade?  Meaning where does fiat enter the system, and how?  To my best understanding a pure P2P exchange would still require a clearing house for the transfer of fiat or some other commodity that is not a digi-coin, such as LTC or another digi-coin.

Also to my best understanding of the macro view of any human group is that there does need to be some kind of central authority.  It exists in the very fabric of BTC in the BTC devs are a central authority.  Imagine if BTC splintered like Linux?  I'm no Linus expert, but to my understanding is that even if all flavors run the latest Linux kernel that does not mean each runs the same way.

So BTC and the world does need a large driving central force behind providing liquidity to BTC.  I'm trying to solicit ideas for how to make this centralized force as open source and purely democratic as possible.

The p2p exchange will only handle the order book and order matching and create a virtual exchange of brokers!
It is the brokers responsibility to handle fiat, bitcoins or whatever asset they enable trading in.

Please read the git so you understand more about the solution we are talking about:
https://github.com/p2p/bitcoin-exchange
https://bitcointalk.org/index.php?topic=172705
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April 13, 2013, 01:08:35 PM
 #15

wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley

1Pbwistg1HTNMtZw2hiGQQzcKrdY2kPBS
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April 13, 2013, 01:47:58 PM
 #16

wow, all these ideas for buying and selling BTC for a profit more efficiently! how about, don't? how about using BTC as a currency, to buy and sell stuff and services like its supposed to be used instead of trying to make a quick buck exchanging it? these kinds of posts are simply proposing to fix the problem by making the problem more efficient  Roll Eyes

lets improve liquidity by introducing better markets?! its the lack of liquidity that prevented BTC from hitting rock bottom and the little liquidity there is comes from people trading with BTC instead of trading in it. as with the mainstream economies, its that competitive greed that is ruining the currency, making it more volatile and therefore less suited to exchange of goods and services, further eroding the liquidity - it is supposed to be a cooperative currency and trying to make money from money (at the expense of others) is not a very cooperative occupation  Sad

how about mining pools controlling the sale of BTC (they are after all, creating the currency) or some sort of mechanism to make BTC "rust" (it could simply rust back into mining rewards instead of disappearing, preventing this competitive mindset and encouraging more circulation  Smiley

A better market for BTC will lead to a more stable price and better acceptance of BTC from merchants.

Assume you got a bar: You want to get paid in BTC but want to be sure you get about 4$ for each bear. How can you be sure you get 4$ +/-1% if the prices goes up and down 30% every day and the biggest exchange is unable to handle trading several times a week?
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April 13, 2013, 02:27:11 PM
 #17

Not a tech person, but I firmly now believe that the DDoS attack is coming from a competitor.  Yesterday i visited a certain exchange to view prices because it performed well and there was even a troll box that had the posts of 12 years olds that made things amusing. This GOX competitor was the only site that my Laptop went to yesterday, it stayed on that site. At the end of the day when I went to shut my laptop down, the cursor was frozen and as a result the laptop was locked up. I cntrl+alt+del and restarted my laptop but the issue remained the same once the laptop completely loaded.  The GOX competitor I speak of is the shady Russian one that didn't go down when all the other exchanges were failing. So something is weird with them.  

So enough of my digression, how would what is being proposed here solve the issue of DDoS and other attacks, especially if these attacks are coming from highly organized individuals/groups?



 
 
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April 13, 2013, 02:32:16 PM
 #18

Not a tech person, but I firmly now believe that the DDoS attack is coming from a competitor.  Yesterday i visited a certain exchange to view prices because it performed well and there was even a troll box that had the posts of 12 years olds that made things amusing. This GOX competitor was the only site that my Laptop went to yesterday, it stayed on that site. At the end of the day when I went to shut my laptop down, the cursor was frozen and as a result the laptop was locked up. I cntrl+alt+del and restarted my laptop but the issue remained the same once the laptop completed loaded.  The GOX competitor I speak of is the shady Russian one that didn't go down when all the other exchanges were failing. So something is weird with them. 

So enough of my digression, how would what is being posted here solved the issue of DDoS and other attacks, especially if these attacks are coming from highly organizationed individuals/groups?



So far no one has been able to DDOS the bitcoin itself since it is p2p.
The brokers sites might of course go down even if we have a p2p exchange -  but when you got a huge p2p exchange with 100s of brokers connected to it the chance is slim that such groups would be able to shut down all brokers at the same time.
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April 13, 2013, 02:40:34 PM
 #19

Hi Gollum,

I believe that your 100% correct. How would we get around the FINCen regs for multiple exchanges.


 
 
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April 13, 2013, 02:46:20 PM
 #20

Hi Gollum,

I believe that your 100% correct. How would we get around the FINCen regs for multiple exchanges.

Legal problems should be solved by the brokers in each country - not by us.

What we want to accomplish should actually not affect the legal issues - it is just a technical issue.

Instead of MtGox and BitStamp and XYZ having the order processing inhouse, they outsource that part to thousands of miners around the world.
The brokers need to do legal bullshit today, and they will still need to do that shit with a p2p exchange.
That is not the exchanges problem - since the exchange is only a blockchain just like bitcoin itself.

I can bet this p2p exchange will be more secure, more stable than the big exchanges at Wall Street, at least we wont have HFT-algos robbing the rest of the market every nanosecond.
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