Less technical discussion of Nxt Multigateway (MGW) from jl777
I have been watching this for months. I was just wondering about this post on a different forum. It seems like NXT multi-gateway has to use keys. Ripple can process things like oil, dollars, euros, and gold. These things don't have keys. That would mean really NXT multi-gateway is not like Ripple, but more any exchange that only deals with coins. Is that right?
James' reply (not quoted so it is easier to read):
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multigateway is designed for bitcoind and its forks to go into and out of NXT AE.
NXT AE itself can do a lot of things and is the right thing to compare against ripple.
For MGW I decided not to use the user's key as there is no assurance that they will be around to sign a tx when needed. The multisig accts have the keys held by the three MGW servers. While each person gets his own multisig deposit address (for each supported coin), these addresses are actually used by MGW as pieces of the virtual wallet. There is no central wallet, but rather the sum of all the multisig accts.
You might ask, how can MGW tell apart a user deposit from internal funds transfers. Yes, this was a problem,but I decided to charge a small fee on withdrawal and that fee creates a small output (currently equal to txfee) to flag whether an output is a user deposit or internal transfer. This solves an otherwise tricky problem and I can tell for sure if an unspent output is a user deposit or internal transfer.
Every withdraw triggers an acct balancing via internal transfers. This way, all the multisig accts will converge to the average balance. Not only does that make it possible for a higher withdraw rate throughput, it also discourages hackers from bothering as it is a lot of work to break into multiple servers and then construct raw multisig transactions all with a time sensitive deadline as hundreds of nodes will be monitoring every blockchain event related to MGW
So, you will be able to track the amount in your multisig acct, but the contents do not represent your balance, rather the amount of assets inside NXT AE represents your balance. I hope that makes sense.
So MGW is not fully trustless, you have to trust that we will continue to operate the MGW. It uses 2 of 3 multisig so even if one server disappears without notice, we can always recreate new accts from the two remaining servers. As of now bithaus will be running one of the servers and I am still searching for the third host. Until we do, TEAM staff will be running the pair of MGW servers.
The fee structure to begin with will be no cost for deposits other than the 1 NXT to generate the AM to request a deposit address. and two txfees for a withdraw. This is an introductory rate as MGW will be spending 1 NXT txfees on AMs and that cannot be sustained forever. If the txfee is reduced to 0.1 NXT, then maybe it wont be a big deal. So MGW will definitely be a big step up from centralized exchanges which either have a large central wallet or large cold storage wallets, either which can be compromised with a single intruder.
MGW will be able to handle an arbitrary number of deposits as the deposits are just entries in the various blockchains and they are not moved at all and utilized in place. The withdraws are currently limited to ~1000 withdraws per day per coin, but this can be increased when there are enough accounts.
The NXTservices that has the MGW client is running 99% the same software as the MGW server. So it can precisely monitor what the MGW servers are doing, including calculating the balances in all the accounts, monitoring pending deposits/withdraws, etc. I do not believe any centralized exchange has this level of visibility. Everyone will know that for each satoshi of BTC assets, there is a corresponding amount in unspent outputs in the sum of the multisig accts.
James
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Source:
https://nxtforum.org/nxtventures/mgw-multigateway/msg44493#msg44493
