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Author Topic: A Distributed Market  (Read 1387 times)
seventoes
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May 03, 2011, 10:21:08 AM
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So, btcex attacking MtGox has shown that these markets we're all using are not reliable enough to scale up. Sure, they can put DDoS protection in place and do all of the standard things, but the fact still remains that they're centralized.

Has there been any serious discussion about decentralizing the currency exchanges?

I was mulling this over a bit in #bitcoin on freenode, and the one big problem I see with implementing such a thing is how to get the other currencies into the market in the first place. There obviously needs to be a central place to hold the various currencies, so I pretty much concluded that because of this fact, this might be impossible. Any thoughts?

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May 03, 2011, 10:56:44 AM
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You could decentralise by having multple servers that all sync off each other, so to bring the entire exchange down you would need to bring down all the servers. Other than that there isn't really much you can do.

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May 03, 2011, 11:00:30 AM
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or to have competitors. I really like bitmarket.eu because:

* it's in euros
* you can buy without waiting for you money to be transfered to them
* the interface is nice and easy
* there's no fee.

So it's already decentralized. Exchange is still happening. We only need more of them

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riush
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May 03, 2011, 12:23:32 PM
 #4

and now bitmarket is down Wink

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Mike Hearn
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May 03, 2011, 02:15:04 PM
 #5

The P2P network contains a meet-in-the-middle protocol that could be used for setting up distributed trades.

However given that the network is very easy to DoS in many ways, and can't be easily upgraded, bulking up DoS defences on a few websites is almost certainly easier and more robust
PLATO
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May 04, 2011, 03:48:54 AM
 #6

Crossposting from my post here:

Quote from: PLATO
some ideas for a decentralized (but not distributed) system

Judging from Paypal's recent shutdown of Coinpal and Bitcoin Morpheus, they are no longer willing to play nice. I would not be surprised to see bank transfers become more difficult, too. The fundamental problem with all exchanges (as of 05.11 ) is that it's really hard to buy bitcoins. No matter what route you take, you have to jump through hoops. A (really large) number of people are not willing to jump through any hoops at all.

The primary means of 'getting in' for most new users will be cash. There are a handful of projects that are attempting to set up a global network of cash-to-bitcoin-to-cash dealers; the ones I know about are


We should integrate all of these efforts right now, while they're all still in development. It's inevitable that some efforts will fail, so we should try to make the system robust enough to absorb those failures. We should have a common way to identify a particular exchanger that is exportable to multiple websites (i.e. a GPG key.) #bitcoin-otc already has a significant web of trust set up, and it's not hard to integrate import that into other applications.

If we have multiple sites using information from a single web of trust, we should decide on a common API to communicate between those sites. Right now, the OTC database records a user ID (gpg key), a rating from -10 to 10, and a notes field. This is fine for -otc, but other sites will likely want to record additional information in their own webs.

Some stuff that might be saved in a WOT database: contact information, services offered, currencies offered, availability times, trade volume limits, rough GPS coordinates.

If we agree on a protocol such that all sites can share data, we can make the whole Bitcoin economy a 'decentralized exchange.' When any one site fails, another can take its trust database and start with that. To avoid tampering the databases should probably be public knowledge.

edit - since anyone can look up the trust ratings of a particular identity online, many new users may be willing to trust a nearby exchanger enough to send a money order or cashiers' check through the mail. If they send it locally, they should be able to get their coins within a day or so, especially if they email the exchanger a heads-up. Exchangers who are unwilling to meet face to face can do this too, although it might be hard to build trust.
seventoes
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May 04, 2011, 12:07:50 PM
 #7

Hmm that thread seems much more focused than this one. I'll continue discussions over there, then Cheesy

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