Will Bitcoin client do direct peer-peer coin exchange

[coinbridge]

Is there a plan in the future Bitcoin versions to implement a function to allow the user to directly trade Bitcoins with altcoins without the "take and run" risk? I see this as a valuable feature and wonder if it's already built into the current Bitcoin protocol or it can be easily added to the current client via an API.

[BurtW]

I assume you are asking for the following:

Wallet one:  send X BTC to wallet two but only after getting Y crapcoins.

Wallet two:  send Y crapcoins to wallet one but only after getting X BTC.

Someone has to go first.

They are on different protocols.

Now I could see someone offering a web site escrow service that would do something like this.

Wallet one:  put X BTC in escrow at the escrow site, waiting on Y crapcoins.

Wallet two:  put Y crapcoins in escrow at the escrow site, waiting on X BTC.

Escrow site:  when both parts of the escrow are confirmed, send Y crapcoins to wallet one (minus a fee) and send X BTC to wallet two (minus a fee).

[coinbridge]

Yes but I want to do it without going through a centralized exchange. The trade needs to be direct peer to peer, no escrow accounts and so on. There can be a website where people post offers and bids and make deals but the actual exchange are purely between their wallets.

[BurtW]

I do not see a way to do it without escrow because someone has to go first or you have a deadlock - see my post above.

Maybe someone smarter than I can help you out.

[coinbridge]

The question always is: who sends first?

That's when middlemen step in, but that's the old world way!

I can see crypto-fiat trade in that fashion because there are no options.

But inter-crypto trades going through centralized exchanges is a disgrace.

It's deeply unsatisfying to see that, especially the solution is very simple for crytocurrencies. I don't know why Bitcoin does not have this feature. May be it never anticipated the viability of altcoins.


 

[BurtW]

The question always is: who sends first?

That's when middlemen step in, but that's the old world way!

I can see crypto-fiat trade in that fashion because there are no options.

But inter-crypto trades going through centralized exchanges is a disgrace.

It's deeply unsatisfying to see that, especially the solution is very simple for crytocurrencies. I don't know why Bitcoin does not have this feature. May be it never anticipated the viability of altcoins.

So, you already have a solution to the "who goes first" issue?  Can you describe it please.

[coinbridge]

I do not see a way to do it without escrow because someone has to go first or you have a deadlock - see my post above.

Maybe someone smarter than I can help you out.

Yes you can do it without escrow. I just want to know if Bitcoin or any altcoins already have it in the plan so I'm not wasting my time.

[coinbridge]

The question always is: who sends first?

That's when middlemen step in, but that's the old world way!

I can see crypto-fiat trade in that fashion because there are no options.

But inter-crypto trades going through centralized exchanges is a disgrace.

It's deeply unsatisfying to see that, especially the solution is very simple for crytocurrencies. I don't know why Bitcoin does not have this feature. May be it never anticipated the viability of altcoins.

So, you already have a solution to the "who goes first" issue?  Can you describe it please.

I'll describe it that after I get some responses to my original question.

[StevenS]

The only way I can see this working is if there is a kind of transaction (tx) that depends on a tx from a different protocol. That is:

tx1: Send X BTC to wallet two if and only if there is a tx2 (which has to be allowed to be attached after tx1 is signed) that meets certain parameters, such that it sends Y altcoin from altwallet two to altwallet one. Part of tx1 has to be a "timeout" value that either cancels the transaction, or sends the BTC somewhere else if tx2 doesn't happen.

After the owner of wallet two sees tx1 on the network, he could then issue tx2, which would do the altcoin transfer and also be attached somehow to the Bitcoin blockchain.

The problem is that this would greatly complicate the Bitcoin protocol. I have trouble seeing how something like this could be made generic enough for arbitrary altcoins.

I would guess that there is a .01% chance of this happening.

[maaku]

Someone has to go first.

They are on different protocols.

This is incorrect. See, for example, CoinSwap and the atomic exchange contract on the bitcoin wiki as ways this could be done now.

Also, with protocol extensions the limitations of these techniques could be worked around as well.

[coinbridge]

So if Bitcoin does not have such a protocol in place, how hard is it to implement such a protocol in the future? What would prevent it from doing this?

[BurtW]

Coinswap is all Bitcoin and uses the current protocol without any changes.

I was thinking about CoinJoin.  See below.  Oops.

[maaku]

There's no reason you can't do CoinSwaps across chains (it's even mentioned in the introductory post). Maybe you're thinking of CoinJoin?

[BurtW]

Ah yes those two names are so similar.  Nevermind.  Carry on.  This could be very interesting as long as it can be done with no changes to Bitcoin.

[coinbridge]

Ah yes those two names are so similar.  Nevermind.  Carry on.  This ccould be very interesting as long as it can be done with no changes to Bitcoin.

I'm puzzled by the insistence not to changes Bitcoin protocols. Is it a technical challenge? In my mind they can't they just do that in the next version update?

[prezbo]

Ah yes those two names are so similar.  Nevermind.  Carry on.  This ccould be very interesting as long as it can be done with no changes to Bitcoin.

The atomic cross-chain trading maaku mentioned already works without any changes to the protocol(s), all it needs is an easy to use implementation.

[BurtW]

Ah yes those two names are so similar.  Nevermind.  Carry on.  This ccould be very interesting as long as it can be done with no changes to Bitcoin.

I'm puzzled by the insistence not to changes Bitcoin protocols. Is it a technical challenge? In my mind they can't they just do that in the next version update?

One of the best things about Bitcoin and the Bitcoin protocol is that it is basically impossible to change.  It is one of the reasons I and many others are here.  If it could be changed as easily as a next update then I and many others would not be here because it would just devolve into a total steaming pile of crap trying to satisfy everyone's whims.

Maybe now you can understand why us cranky old timers get so tired of threads that start "Bitcoin is cool but it need to be changed to do _____", because one to the best things about the design of Bitcoin is that it is impossible to change it to suit the desires of the day.

[whtchocla7e]

If doesn't matter who sends first as long as both parties initiate the transaction. The bitcoin client acts as the escrow and handles the sending. A black box.

[BurtW]

The atomic cross-chain trading maaku mentioned already works without any changes to the protocol(s), all it needs is an easy to use implementation.

Sounds great.  The OP can take that and run with it.  I am looking forward to the results.

[Klestin]

Beat to the punch.