Transaction pipe fatness and the Digitalis Open Transactions serverOkay, let us suppose that someone is interested in buying, lets say, a United Kingdom Britcoin (UKB).
Looking around for places where people trade such things, they happen across
the Digitalis Open Transactions Server.
Looking at their junk pile of lottery-tickets aka their collection of altcoin wallets, they happen to pick Ixcoin as the coin they figure they can afford to part with some of to take a gamble on this UKB stuff that has somehow caught their interest. (Maybe they met a member of
Britclan on
MUDgaard, for example, and thus learned of the existence of
UKB and thought it might be nice to have some, if only to have an "in" with that clan.)
So okay, lets say that they also learned of the "last known value" readout located at
http://galaxies.mygamesonline.org/latestrates.inc ... They look at those "latest rates" and see that Ixcoin's latest known value is listed as IXCrate=236.85086190 and UKB's latest known value is listed as UKBrate=131720558.06933953
From that it is trivial to compute that the value of UKB
in Ixcoins, (UKBrate / IXCrate), should, if markets operated efficiently, have been somewhere around 556132.90579855 Ixcoins per UKB.
Now obviously people waiting patiently to sell UKB for IXC would obviously be hoping/waiting to sell for more than that, and people patiently waiting to sell IXC for UKB would obviously be hoping/waiting to sell less IXC than that for each UKB, so likely the actual prices asked and offered would have been above and below that figure, with people who are in a hurry paying a premium to get what they want as soon as they can get it.
So anyway, this prospective buyer of UKB decides he wants to get, say, 600000 IXC onto the Open Transactions server so as to try to buy a UKB even if UKB turns out to have gone up in valuation compared to IXC by the time they are actually able to place a buy offer or take someone up on a sell offer.
This is where the "fatness of the pipe" comes in.
It turns out that the server only actually has 10,000 digiIxcoins (dIXC) in existence, because the cold storage vaults backing the digitokens on the server only contain 10,000 deep-frozen actual on the blockchain Ixcoins.
So, the most dIXC anyone is going to be able to sell in one shot is 10,000.
So, our hero seeks out people who have dIXC on that server who are willing to sell some dIXC in return for some actual real on the blockchain Ixcoins.
If he is lucky, he is able to find a so called market maker, who, just like the various third party sites that used to sell people e-gold, or Liberty Reserve, or who still sell people Pecunix, is in the business of selling people digitokens for actual on-blockchain coins, and has some dIXC for sale for real actual IXC.
The most dIXC that market-maker could have available is 10,000 since that is all that have actually been issued. Maybe our hero gets lucky, and that market-maker happens to be holding all ten thousand of the dIXC that exist. Awesome! Our hero buys them using real on the blockchain Ixcoins. A transaction pipe ten thousand dIXC fat is now possible for our hero to use to buy UKB!
Oops, here we hit another little glitch! It turns out, possibly even to our hero's surprise, that the Digitalis Open Transaction server only deals in integer numbers of things. Whole shares, whole coins, whole whatevers. Whole United Kingdom Britcoins, for example. There is no dealing in fractions of a coin. If you want to deal in smaller granularity, that is what lower-value coins/assets are for!
So our hero looks again at
http://galaxies.mygamesonline.org/latestrates.inc , this time looking to see what thing has the lowest last known value. It happens to be the case at that time that the lowest value shown is DVCrate=1.00000000 , because in general the list of values has the best "granularity" when the lowest-valued asset is used as the asset in which the values are denominated.
So, he can now compute that in order to buy one dUKB he would need UKBrate dDVC, that is, 131720558.06933953 dDVC.
Checking with the market-maker, lets say he gets lucky again and learns that the market-maker sells DVC and has the entire 200 million dDVC that is the entire total of all the dVC that have been issued onto the server. Awesome, that is enough dDVC to buy a whole dUKB!
At this point our hero is quite likely to ask the market-maker whether, perchance, the market-maker happens to deal in UKB or dUKB, since it is becoming apparent that if you could trade on the blockchain coins for on the blockchain coins without going through an Open Transactions server maybe this whole Open Transactions thing could be avoided and he and the market-maker could simply do a direct person to person trade of IXC for UKB.
Ah but there is a catch, it turns out. Actually, two catches!
One is that this particular market-maker does not carry UKB, because he only deals in actual on the here-on-
the planet known as Earth blockchains and the digitokens used on the Open Transactions server to represent such coins.
Two is that UKB does not operate on a blockchain here on
the planet known as Earth, because on this planet miners charge such outrageously massive fees for hashing blockchains that it would be crazy to even attempt to secure a blockchain at such usurious rates. Thanks to the lack of affordable hashing power to secure a blockchain on this planet, UKB operates on this planet using Open Transactions servers instead of blockchains.
So, okay, our hero says, I want to buy 135 million dDVC on the Digitalis server, using actual on the blockchain Ixcoins.
Lets get our fatness of pipe thing back into the story here though, shall we, so we can show how, in the case of things low enough in value per each such thing that at least one such thing can be bought using the fatness of pipe you have at hand, you can do multiple trades to add up to the value you want to move...
So our market-maker says oh sorry but I already have ten thousand actual on the blockchain Ixcoins, which is all I will ever need, at least until the Digitalis server sees fit to issue more dIXC, so I don't want any more of your actual on the blockchain Ixcoins. But I will work around this problem for you, because market-making is what I do so solving problems such as this is my bread and butter. First off, if you would be so kind, let me refund you your actual on the blockchain Ixcoins, as I will be needing those ten thousand dIXC tokens I sold you for them. Thanks. Now watch as I offer those dIXC for sale for something else, hmm, it has to be something I can buy at least one of for only 2,360,000 dDVC or less because that is about what these 10,000 dIXC are worth. Hmm, lets pick dNMC, as those are only worth about 11500.79662986 dDVC and I happen to know a chap who has lots of them and who collects all the merged mined coins so I know he will be interested in buying some actual on the blockchain Ixcoins. Yes, sure enough, lookie there on the ten thousand scale dNMC/dIXC market, that offer to buy up to a hundred lots of ten thousand dIXC per lot for dNMC is probably him. I'll sell the dIXC to that offer. Oh lookie here, as I expected his scripts automatically sent me a request to buy some real on the blockchain Ixcoins for ten thousand digiIxcoins! Ha! Y'see I know he really prefers on the blockchain coins to digitokens so I figured he would do that. I am his usual market-maker, and I already told him I'd keep an eye out for actual on the blockchain Ixcoins for him to buy from me for dIXC. Now, please, send ten thousand real on the blockchain Ixcoins to him, here is the address he has me send real Ixcoins to him at. He - or his scripts, anyway - will send me back the dIXC on the Digitalis server and we can sell it to him again for more digiNamecoins, and so on until we have enough digiNamecoins to buy you a digiUKB...
-MarkM-
