Centralization Will Bring Down Bitcoin

[SGExodus]

Exchanges are already decentralized.

They are also highly profitable businesses, and you can be sure more investor will want to setup exchanges to serve their local community.

However, it will take time for new exchanges to build up their reputation and to work with their respective local authority for the right operating license.

These will naturally replace the needs for cross boarder transaction with Mtgox.

[lophie]

Exchanges are already decentralized.

They are also highly profitable businesses, and you can be sure more investor will want to setup exchanges to serve their local community.

However, it will take time for new exchanges to build up your reputation and to work with their respective local authority for the right operating license.

These will naturally replace the needs for cross boarder transaction with Mtgox.

No they are not decentralised. The count is a misconception of decentralization. Unless it is a pseudo P2P network.

[Operatr]

Exchanges are already decentralized.

They are also highly profitable businesses, and you can be sure more investor will want to setup exchanges to serve their local community.

However, it will take time for new exchanges to build up your reputation and to work with their respective local authority for the right operating license.

These will naturally replace the needs for cross boarder transaction with Mtgox.

They are anything but decentralized, therein lies the problem. MTGox is only a problem because it was one first exchanges, naturally without a lot of other options they carried 80% of trade, which makes it dangerous to the market as a whole. This is changing with more exchanges starting to come online.

We need a true p2p exchange platform to truly decentralize it. Though Gox and others are still necessary as intermediaries from coin to fiat currency.

[SGExodus]

They are anything but decentralized, therein lies the problem. MTGox is only a problem because it was one first exchanges, naturally without a lot of other options they carried 80% of trade, which makes it dangerous to the market as a whole. This is changing with more exchanges starting to come online.

We need a true p2p exchange platform to truly decentralize it. Though Gox and others are still necessary as intermediaries from coin to fiat currency.

You are barking the wrong tree.  MTGOX isn't the problem.  The problem is why aren't there other options.   What happen to all the other exchanges that come and go?   Why can't they run a viable business to attract and keep their customer.

No matter how you design your P2P platform, the exit point is going to be an exchange of some sort for you to convert crypto to fiat and vice versa.     

If the exit node is badly run, they will still not get sufficient participation.  Either they run out of cash to buy your crypto currency, or they run out crypto currency to sell to the user, or in worst case scenario, they go rogue and run away with your money.


 

[🏰 TradeFortress 🏰]

They are anything but decentralized, therein lies the problem. MTGox is only a problem because it was one first exchanges, naturally without a lot of other options they carried 80% of trade, which makes it dangerous to the market as a whole. This is changing with more exchanges starting to come online.

We need a true p2p exchange platform to truly decentralize it. Though Gox and others are still necessary as intermediaries from coin to fiat currency.

You are barking the wrong tree.  MTGOX isn't the problem.  The problem is why aren't there other options.   What happen to all the other exchanges that come and go?   Why can't they run a viable business to attract and keep their customer.

No matter how you design your P2P platform, the exit point is going to be an exchange of some sort for you to convert crypto to fiat and vice versa.     

If the exit node is badly run, they will still not get sufficient participation.  Either they run out of cash to buy your crypto currency, or they run out crypto currency to sell to the user, or in worst case scenario, they go rogue and run away with your money.

Because regulation, licenses , etc aren't cheap.

[lexxus]

Because regulation, licenses , etc aren't cheap.

Yes, that's exactly why we will never have 100 competing legit exchanges. Just think of stocks, bonds, even forex. You cannot simply open another exchange while being 100% transparent and legally secure. That's exactly the reason why there is so small competition to Gox even taking into account huge profit margin one can have. Thus no number of ordinary exchanges will replace a good p2p exchange.

[CMMPro]

P2P is the way to go, turn the exchanges into a Hydra with a million heads that can't all be cut off.

Have the client handle their own buy/sell info and distribute the load of a virtual exchange via VPN.

Make the entire network a single virtual trading floor where everyone can digitally "shout out" their order.

[altsay]

I dont want to scan my national id and bills and send them to mtgox. Where is the privacy?

[Chaoskampf]

P2P is the way to go, turn the exchanges into a Hydra with a million heads that can't all be cut off.

Have the client handle their own buy/sell info and distribute the load of a virtual exchange via VPN.

Make the entire network a single virtual trading floor where everyone can digitally "shout out" their order.

Exactly. Easier said than done, obviously, but this is the only way that I can imagine Bitcoin progressing to the next level of legitimacy.

[mobile4ever]

If no centralization like Mt Gox, How can we know what our bitcoins can buy?

You could ask your neighbor how much they would take for a bitcoin. Since bitcoin is still in beta, you will be doing him or her a favor by just mentioning it to them.

[Chaoskampf]

If no centralization like Mt Gox, How can we know what our bitcoins can buy?

You could ask your neighbor how much they would take for a bitcoin. Since bitcoin is still in beta, you will be doing him or her a favor by just mentioning it to them.

A "price" is simply a measure of how much someone values a good. If I can find someone willing to pay $500 a Bitcoin, then that's the price of Bitcoin, regardless of what's happening on some Japanese website.

[Chaoskampf]

What I don't understand is why no one is trying to create Satoshi's suggestion regarding this matter...... sigh... maybe one day after I finish the projects at hand.

What exactly was his recommendation?

[halfawake]

I love the idea of a totally decentralized exchange like this.  But I see one legal problem with it: if the government sees this going on and realizes what is happening, it's likely going to treat it as money laundering.  I don't see any way this can happen and actually be thought of as legal by the US government.  Would it be harder to target than an exchange?  Absolutely, but by no means impossible.

[Chaoskampf]

I love the idea of a totally decentralized exchange like this.  But I see one legal problem with it: if the government sees this going on and realizes what is happening, it's likely going to treat it as money laundering.  I don't see any way this can happen and actually be thought of as legal by the US government.  Would it be harder to target than an exchange?  Absolutely, but by no means impossible.

They wouldn't be able to see that those accounts are linked into a large network, because the underlying program would be invisible. After a very long time they might notice patterns emerge, since transfers are being made to nodes on a semi-regular basis, but on the surface it would just appear as a small account with a few thousand dollars sending out a few hundred dollars to other small accounts at very irregular time intervals. Also, they already consider Bitcoin itself as a money laundering vehicle, so it's too late to worry about that.

[Blueberry408]

MY FACE EXACTLY

[Chaoskampf]

MY FACE EXACTLY

As in, you're interested? Or you're amazed that anyone would consider this?

[BitcoinAshley]

I have a better idea: Start a buttonwood in your local area.

Advertise it on Craigslist (yes, I've seen bitcoin ads on Craigslist), localbitcoins, meetups section of forum, other forum, Facebook, etc.

Show up each week and wait.

 

Worst case scenario, you get extra time to read books or check email.

Best case, you get a free exchange and place to trade bitcoins for cash and vice versa.

Not only cash! If you live in an interesting, diverse, and somewhat popular area, you can have people selling turnips for bitcoins, or gold/silver, or goods/services. You never know what kind of monster you can create...

[Chaoskampf]

I have a better idea: Start a buttonwood in your local area.

Advertise it on Craigslist (yes, I've seen bitcoin ads on Craigslist), localbitcoins, meetups section of forum, other forum, Facebook, etc.

Show up each week and wait.

 

Worst case scenario, you get extra time to read books or check email.

Best case, you get a free exchange and place to trade bitcoins for cash and vice versa.

Not only cash! If you live in an interesting, diverse, and somewhat popular area, you can have people selling turnips for bitcoins, or gold/silver, or goods/services. You never know what kind of monster you can create...

How would I get $500,000 worth of Bitcoin at a buttonwood? How bout a million?

[halfawake]

I love the idea of a totally decentralized exchange like this.  But I see one legal problem with it: if the government sees this going on and realizes what is happening, it's likely going to treat it as money laundering.  I don't see any way this can happen and actually be thought of as legal by the US government.  Would it be harder to target than an exchange?  Absolutely, but by no means impossible.

They wouldn't be able to see that those accounts are linked into a large network, because the underlying program would be invisible. After a very long time they might notice patterns emerge, since transfers are being made to nodes on a semi-regular basis, but on the surface it would just appear as a small account with a few thousand dollars sending out a few hundred dollars to other small accounts at very irregular time intervals. Also, they already consider Bitcoin itself as a money laundering vehicle, so it's too late to worry about that.

Yep, true, I'm sure they already consider bitcoin a money laundering vehicle.  But so far they're only targeting the exchanges, not the users.  That would change with this system.  I could be wrong, but me, personally?  I'd rather them target the exchanges than the users.  Let someone else have the legal burden of bitcoin.  (Assuming you're not in fact operating an exchange yourself, in which case, you would be that someone else.)

[malanis]

I haven't fully read the OP, going to go more into it later when my head is clear.

https://bitcointalk.org/index.php?topic=208945

Check out my idea there, want to create a blockchain for IOUs.  Basically ripple but open source, that way people can exchange currencies with a trust based system.