Well currently slack is helping me find bloggers and places where we can publish more articles
also I've been editing some articles they intend to publish (somewhere)
As for the Buying and selling of coins at Abritrage I LOVE the idea. Did you know that the
client already has a template for this? The buy/sell coins template actually will track
the price of the coin in fiat by converting to btc and usd. You can set your preferred
funding method and can let it automatically track market prices. It was intended for low volume.
Think of it like a decentralized "local bitcoin" without the need for a middleman and trustless
Decentralized exchange was promised to Blackcoin. The NightTrader exchange was supposed to be
based on deposits. Although they did not pay me, I want to finish that project as I like it.
The problem and delay with it has really been choosing a protocol. There are 3-4 decent methods
on how to do it which I can list below:
1) The original NightTrader concept of MICROTRADING: This method was basically to use Blackcoin
as the deposits and trade 50% of the deposits over and over again until funding is reached in
any two currencies. VERY similar to the Barter Template. Example
Bob wants to but 5 btc of Bitbay from Alice
1 btc worth of Blackcoin is deposited both sides
.5 btc of Bitbay is traded for .5 btc of Bitcoin 10 times
Now 5 btc has been traded deposits are released
This works with ANY two currencies and does not require any coin to fork. Thus is the perfect current
solution
There are DRAWBACKS though and here is some of them:
Its too slow! Nobody wants to wait for 10 bitcoin transactions which could take days if network is slow
It can bloat the blockchain if the Exchange is too popular (since there is more transactions)
If the price of Blackcoin goes too low during a trade it would be beneficial to blow up deposits
Transacting with multiple people in the order book becomes annoying (think 10 contracts to fund a few btc)
The following methods dont need to rely solely on Blackcoin or Xcoin but have their own drawbacks too
2) The next method is ATOMIC TRADING. This wonderful little trick is to use locktimes to put the solution
to a hash problem in your transaction so that it unlocks another transaction. Both parties use separate
locktimes so they can redeem their funds if the corresponding locks arent sent.
Advantages over microtrading:
You dont need more than one transaction
You dont need to involve 3 currencies
Disadvantages:
Its still a little slow, Bob and Alice need to give lots of time in case of power outages plus they still need
to wait for several confirmations
Checklocktimeverify is NOT in more than a few coins Blackcoin Bitbay Shadowcash Peter Todds coin etc
I dont even think Bitcoin has locktimes
3) The next method is Multisignature exchange its CENTRALIZED but many times more SECURE than normal exchanges
This was one of the serious candidates for NT exchange but it doesn't really rely on BLK it just uses the name NT
The way it works is simple:
The exchange holds a 2nd key to ALL accounts
To perform trades the exchange uses signature hashes like SIGHASH NONE or SIGHASH SINGLE to have
users sign only the coins they intend on trading as a Blank Check
To secure the blank check the exchange puts in a small nominal amount of coins like 5500 satoshis
Then the exchange is free to do very fast exchanging in the form of IOUS and only on withdraw do you
pay the people you owe.
Because the exchange is only 50% holder of the account, they can not steal funds without your key.
Advantages:
thousands of times more secure and better than a regular exchange
almost trustless but not quite (see below)
a lot faster than the concepts above
Disadvantages:
If a hacker somehow got all the servers keys they could try to find out which private key corresponded
to their multisignature address. Then they can withdraw renegging on their IOUS.
However the above attack only steals the amount of coins they traded. But if they were a whale this
could still be devastating. Its will be hard for them to time double spending though.
Also, if the exchange wanted to be evil they could sign IOUS to the wrong addresses taking funds
Also, the exchange could pretend to be a user and make trades and still take funds
Also, the exchange could lose their keys in a fire or HD crash and any coin without locktimes will lose their
funds so the exchange would have to have a way of backing up their orderbook and keys on paper
The biggest disadvantage is LIABILITY. Because its not decentralized there is much responsibility even if no hack occurs
4) The last and best way for decentralized exchange is the LIGHTNING NETWORK and P2P MICROTRADING
This is a newer idea of mine. Its basically forming a Lightning network in each coin and microtrading
between neighbors until the needed amount is reached. Because a lightning network does not report
to the blockchain, they can fund using the most trivial amounts.
How does this work?
Accuonts are daisy chained
Bob->Alice, Alice->John, John->Frank
For Bob to send to Frank he routes his debt through Alice and John
It can also be daisy chained with servers and withdraw tricks Bob->Server Server->Alice
Advantages:
Its probably the best way to do decentralized exchange
Lightning networks completely reduce bloat on blockchains
There are other advantages
Drawbacks:
Since they have to include multiple peers and possibly multiple servers, there could be some
latency but its not much maybe a few seconds at the most.
It requires that all coins have checklocktimeverify and its own lightning network
Its too much work to get it done really well.
SO thats the whole thing. Blackcoins NT will still probably get made with microtrading
despite being not as good as AT or Lightning. Its decentralized and thats what i like about it.
I'm willing to sacrifice speed for security any day. But it may not be popular since traders
will want speed. And it does bloat the blockchain with smaller transactions and peers must
stay connected for a few days to finish some larger trades. Also they will need Blackcoin
and the deposit levels adds an extra amount of complexity to the exchange. The orderbook
can be centralized to help a little with speed. IF there are trolls we can require a BURN for
trades.
Had some time to think about this and just want to give my thoughts on the matter.
1st question: What does the Blackcoin community think about the potential of bloating the Blackcoin blockchain?
2nd question: Even if they agree it's no big deal now, but change their mind in the future, wouldn't that render all the Microtrading coding useless, and require a new system similar to the other 3 you mentioned to be coded?
3rd question: Let's keep in mind also that of all 4 options, which ones are most capable of expansion?
My humble guess would be the atomic trading and lightning networks. Or even possibly an atomic trading system that evolves into a lightning network over time.
So let's say in theory, you go with the AT build and left it at that; as the exchange grows you or other coders work on expansion of AT and gradually enter/combine into a lightning network.
Advantages: You have a code that has no potential for abandonment due to bloating thus voiding the need for a blackcoin deposit. You create demand for other coins to get off their arse and actually code something
- in this case checklocktimeverify. All the while bagholders are bitching at their 'make-believe' dev's of worthless coins, creating mass panic and volatility on exchanges ( that's always fun
). This volatility brings in even more money as pumper groups try to rush buy the next new coin with CLTV creating more attention for cryptocurrency on a global scale. These noobs see crypto as a crazy volatile pile of madness except BitBay because it's powered by UVP peg technology. Yet this creates a big enough demand that someone creates a simplified open source CLTV program that dev's can finally just copy and paste ( all in a days work
). And the rush for CLTV coins causes NightTrader to gain volume and attention at a exponential rate. All the while you are sipping on a Corona on some beach in the Caribbean!
Disadvantages: Bitcoin doesn't incorporate CLTV until 10 years later when the bitcoin foundation finally decides it might be a good thing to include. Other than that - none!
It sort of bloats every blockchain. In fact, it won't bloat Blackcoins Blockchain since they are only used for deposit. I guess
we can say they are the only ones who wouldn't get bloated. But its not so bad, its just we do 10-20 times the size
of a normal transaction. Only if it was insanely popular would it start to show in the networks of coins.
A new system is needed but nobody supports it. If Bitcoin doesn't have locktimes and other coins dont then only centralized solutions work
That is, centralized or NT protocol.
The microtrading is the best way, but you know since someone holds that second key its a liability.
(running an exchange is asking for trouble EVENTUALLY by state regulators, if its not decentralized its not worth the money perhaps?)
AT and Lightning don't share anything in common despite both needing lock times. The protocol is so much different.
Lightning is the only true way to do it if they all had AT. But lots of coins would have to want to do it.
Maybe there is even some weird sidechain implementation for decentralized exchange but i cant think of anything off the top
of my head that would make sense. If its not simple then it probably doesn't work.
Until sidechains are even proven secure (I believe there was some sort of issue with 51% attack on Bitcoin and messing up sidechains)
and there is other coins trying to get them right, so this is all hypothetical.
Sidechains are over hyped. Besides don't we risk security by moving to one? I do like Lisks thing but it all needs to be validated as secure first
For now, Blackcoins microtrader is the best way to do it. And besides, bloat is an issue EVERY coin will face soon enough
Lets just say, it doesn't bloat the chain too much. Not any more than does Bitcoin gambling and nowhere near Etheriums bloat.
BOTNET is the sleeping giant that could crush all coins
