This gives me hope...

[BitSmile]

http://nashx.com/
A more-or-less decentralized exchange, making use of mutually assured destruction and the nash equilibrium http://en.wikipedia.org/wiki/Nash_equilibrium
Looks promising.

Why was it made?

    Because nobody wants to send their money first.

The basic concept

    Traders risk money for destruction in each other's hands whenever they get into a deal.
    So, when one sends the money first, it doesn't benefit the other to just take it and run.

How is it different than MTGOX and BTC-E

    You are anonymous. No personal or bank information.
    You trade directly person-to-person however you want.
    You keep your money in your wallet, and not with an exchange.

How it works

    Make an account.
    Add funds to risk.
    Make an offer, or take an offer.
    Chat to arrange the details.
    Make the transactions.
    Release or destroy risked funds.
    When your fund is destroyed, you will immediately see a transaction id as a proof of destruction.

How are risked funds destroyed?

    NashX literally destroy them by making a transaction from our wallet to our wallet with minimum possible possible transaction amount with funds to be destroyed as the additional transaction fee.
    So the funds go to miners who process these transactions.
    Why don't we keep it? It gives us a bad incentive to make fake accounts and destroy deals
    Why don't we give it to charity? It gives them a bad incentive to make fake accounts and destroy deals
    Why don't we blackhole it? The process to generate one of those addresses that traders can trust that is truly a blackhole is a difficult task in itself, a process similar to mining. We would take this path if we could give each destroy fund a blackhole address of its own quickly, but it's not.
    Finally, we tried to come up with many other ways such as distrubinting to active traders as well as somehow adding randomizations to the distrubiton process and what not, but all of these other solutions potentially give us control to mess with it, or gives some third-party bad incentive to come destroy deals on NashX.

Who sends the money first?

    It doesn't matter, so it's up to the traders to decide/volunteer/negotiate because nobody has the incentive to change their mind after receiving money.
    However, it is advisable that whoever does not have any previous records of making trades send the money first until the trader has built some reputation on NashX by making trades. Reputation can be checked by viewing the deals they've engaged.

Important to keep in mind

    The amount you risk should be twice the amount you're trading in order to keep the deal in Nash equilibrium.

If I want to trade 10 BTC, does that mean I have to risk 20 BTC?

    No, you can simply risk 2 BTC, and trade 1 BTC at a time 10 times. This doesn't mean you have to make 10 separate offers. When you make an offer risking 2 BTC to trade 10 BTC, it is implied that you will make ten 1 BTC transactions going back and forth with your trader.

Some details

    You can add/withdraw funds you can risk into deals (8 confirmations to add, instant withdraw)
    Your offers will expire after 7 days.
    You will receive an email and a popup notification when someone takes your offer.
    You will receive a popup notificatoin when someone messages you.
    There is a little bit of transaction fee to withdraw your risk funds from you account to cover the Bitcoin and Litecoin sending fees. This currently set a little high to cover the cost of operation.
    There is a minimum amount for withdrawing your Bitcoins and Litecoins.
    You can make offers, and delete offers, but once someone takes your offer, it cannot be deleted.
    Everything, including how much risk funds you have in your account, as well as the offers you're making, and deals you've made, and messages you've sent in those deals are availble publicly for people to see and guage your reputation before they decide to take your deal or not.

How does it make money?

    I'm not concerned about that at the moment, There are some fees for withdrawing risk funds from the account, but that covers regular Bitcoin and Litecoin fees. So, right now it doesn't make any money. I just want to see if people will start using it. That way, I can makes trades on it too. After all, I made it because I'd like trade on it.
    Once it gains significant traction, NashX may do one or more of the following to continue to provide its services: 1. Ads. 2. Monthly Fee. 3. Small fee to take an offer by the offer taker. 4. Higher fees for adding/withdrawing risk funds from your account. These are the only ways where no bad incentive is given to anyone which may disturb the Nash equilibirum for traders.
    It may be sold for some amount of money. Feel free to make me an offer.

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[Zaih]

I really REALLY hope this works out.

Bitcoin NEEDS a decentralized exchange so badly. This could be the one (Well nearly lol, it's better than what we got eh?..)...

Good luck & thanks to the developers

[Rampion]

Very interesting and very needed. Watching

[Inedible]

That's quite novel.

[naphto]

Is it supposed to be used by > 20 people within 20 years?

[BitSmile]

Is it supposed to be used by > 20 people within 20 years?

It's supposed to be used by whoever thinks it is a good service. It started 2 weeks ago, I think we will see major activity there if the word gets to the peoples

[Inedible]

Is it supposed to be used by > 20 people within 20 years?

Sounds like what people said about Bitcoin 4 years ago.

[naphto]

Is it supposed to be used by > 20 people within 20 years?

Sounds like what people said about Bitcoin 4 years ago.

Bitcoin is not even close to suceed or even get adopted by anyone, 4 years later.

[Inedible]

Is it supposed to be used by > 20 people within 20 years?

Sounds like what people said about Bitcoin 4 years ago.

Bitcoin is not even close to suceed or even get adopted by anyone, 4 years later.

You never mentioned anything about success (which is debatable). You're making a point about volume.

[BitSmile]

Bitcoin is not even close to suceed or even get adopted by anyone, 4 years later.

It suceeded at least for me...and thousands of other people using it. One thing is being bearish on bitcoin, looking at market cap, etc, the other is saying bitcoin didn't suceed. People continue to mine, transact, exchanging, buying. This new exchange idea is just great for overcoming the regulations by government, banks shutting accounts off, etcetera. Of course, if you use paypal or something like that they block your account easily. I was thinking about using paysafecards, of course, they're only useful for people in Europes, for instantly funding your Bwin, PKR, and other gambling sites accounts. Doesn't work with U.S. purchased codes because of the anti-online gambling laws, for that there is bitcoin.

EDIT: Another option for funds exchanging: https://ewallet.altercards.com/index.php/Common/cms/cms_id/28

It is like Paypal, but less known, and doesn't fuck customers over.

[stepkrav]

I read the about page, but didn't get it how it actually works. Person sends some BTC to whom? A temporary/escrow-like address? And how can he destroy the BTC if things don't work out? Wouldn't be better to get it back rather than destroying it? I'm confused... 

[reg]

Sounds like what people said about Bitcoin 4 years ago.
[/quote]

Bitcoin is not even close to suceed or even get adopted by anyone, 4 years later.
[/quote]

I disagree! I was buying bitcoin 2 years ago for $2 and now I need to pay $100+ for one!. There are still possibilities of peer to peer transactions of all types and the client is up to 4.8.1 Beta! Also I think you have spelled succeed wrong. reg.

    tips:    1HuDKnHJy73CC2QjbqRrixTEzHd3EFEfRs

[ancore]

my head tells me using mutual assured destruction makes sense in this case
but It's not making me feel better about being the first to send money

somehow this still leaves too much a chance the other party will act irrational and choose mutual destruction (assuming the third party can be trusted)
Isn't consciously being in a MAD situation an unpleasant experience? or am I thinking too much about nukes
how do you feel?

[myrkul]

I trust in the greed of the other party to not want to flush his money down the toilet.

[Jobe7]

I trust in the greed of the other party to not want to flush his money down the toilet.

What he said.

[johnyj]

Alice and Bob reached an agreement of exchange Alice's 1 BTC for Bob's $120

Alice deposite risk fund of 2 BTC at NashX, and Bob deposite risk fund of $240 at NashX

Once they reached agreement, their risk fund will be at the other party's control, but they can only destroy it

Alice sent 1 BTC to Bob, and Bob received the BTC and did a bank transfer of $120 to Alice, then release Alice's risk fund. When Alice recieved the wire transferred USD, she also release Bob's risk fund

But, if Alice sent 1 BTC to Bob, and Bob do not want to send Alice the USD, then Alice will destroy Bob's risk fund, so Bob eventually received 1 BTC but lost $240

Bob can also destroy Alice's risk fund, so after that transaction is recorded in the blockchain, Alice's risk fund should be released automatically

BTC users can always initialize the transaction and get the risk fund back, since the transaction is in the blockchain. Seems the first sent medium will always be BTC

Notice that Alice is still be able to destroy Bob's risk fund even after receiving the USD from Bob's bank, this is the weakness of the system, since there is no way to easily prove that Alice did receive the USD from Bob. Of course Bob can provide a bank transfer record, but that is still not any form of machine readable code

And, NashX itself is also a centralized exchange organization, but does not provide some useful function of an exchange, for example automatically match buyers and sellers by the order size so that you don't need to care about your order size being too big



Anyway I like the idea of having some kind of network based trade insurance system, if a system can guarantee that two users can initiate the transaction without worrying about the other's default, then it is a great system

[ancore]

Bob can also destroy Alice's risk fund, so after that transaction is recorded in the blockchain, Alice's risk fund should be released automatically

BTC users can always initialize the transaction and get the risk fund back, since the transaction is in the blockchain. Seems the first sent medium will always be BTC

doesn't this require the exchange (nashx) to know bob's btc address, I thought the whole point was that this would be anonymous

same with risking usd, it's only possible with litecoin or bitcoin or nashx would need to know your bank account or somehow receive cash deposits and refund

[Aswan]

Add an "EUR" option please

[johnyj]

Bob can also destroy Alice's risk fund, so after that transaction is recorded in the blockchain, Alice's risk fund should be released automatically

BTC users can always initialize the transaction and get the risk fund back, since the transaction is in the blockchain. Seems the first sent medium will always be BTC

doesn't this require the exchange (nashx) to know bob's btc address, I thought the whole point was that this would be anonymous

same with risking usd, it's only possible with litecoin or bitcoin or nashx would need to know your bank account or somehow receive cash deposits and refund

That's the point of using blockchain because all the transactions are visible to anyone. NashX does not have any idea of Alice or Bob's identification, it only record the announced transction account and check the balance of each corresponding account to see if funds have arrived, all these can be done by program, and each time Alice and Bob can use different address

But there is no good way to prove that Bob has sent the USD to Alice, so there is still a risk of either Bod do not send or Alice do not acknowledge

Comparing with an escrow service, the Bob first send USD to escrow and after Alice saw the USD at escrow, she sent the BTC, and escrow will check the blockchain and confirm the transaction, then release the USD to Alice. So anyway fund should arrive at a public trusted location, either blockchain, escrow or exchange, when it comes to USD, you must have a USD account at escrow, then it is almost the same as exchange

And since NashX is an unregulated exchange, it will not be welcomed by the government

[BitSmile]

That's the point of using blockchain because all the transactions are visible to anyone. NashX does not have any idea of Alice or Bob's identification, it only record the announced transction account and check the balance of each corresponding account to see if funds have arrived, all these can be done by program, and each time Alice and Bob can use different address

But there is no good way to prove that Bob has sent the USD to Alice, so there is still a risk of either Bod do not send or Alice do not acknowledge

Comparing with an escrow service, the Bob first send USD to escrow and after Alice saw the USD at escrow, she sent the BTC, and escrow will check the blockchain and confirm the transaction, then release the USD to Alice. So anyway fund should arrive at a public trusted location, either blockchain, escrow or exchange, when it comes to USD, you must have a USD account at escrow, then it is almost the same as exchange

And since NashX is an unregulated exchange, it will not be welcomed by the government

But someone could make an exchange working like this on tor, the government is powerless against the tor network. The site itself would be just for finding someone to exchange with and take care of the risked funds. The only drawback is that you would have to have btc or ltc to risk in the first place, before being able to buy more. It would be good if seongyupyoo released the source code.

Link to where I read about it (not here curiously): http://www.policymic.com/articles/39633/what-do-bitcoin-and-mutually-assured-destruction-have-to-do-with-each-other

Link to the discussion on reddit: http://www.reddit.com/r/Bitcoin/comments/1dmeym/nashx_2nd_reddit_revision_persontoperson_bitcoin/