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Offline bitmarket

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I think we should really push this theme in 2015
https://www.youtube.com/watch?v=TtCVRIwcBYU&index=1&list=PLjgfpSQFJTLqbgHm8mkgPdD-ma7t0bRhK

Hopefully Toast got my message and will post this to redit tomorrow morning.
« Last Edit: January 05, 2015, 06:57:52 PM by bitmarket »
Host of BitShares.TV and Author of BitShares 101

Offline BldSwtTrs

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #1 on: January 05, 2015, 09:53:22 AM »
I think we should really push this theme in 2015
Especially with this same shit happening again and again:

http://www.bitstamp.net/
Quote
Bitstamp Service Temporarily Suspended

We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015.

As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins.

IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!

Customer deposits made prior to January 5th, 2015 9:00 UTC are fully covered by Bitstamp’s reserves. Deposits made to newly issued addresses provided after January 5th, 2015 9:00 UTC can be honored.

Bitstamp takes our security and soundness very seriously. In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate.

Bitstamp Team

Offline santaclause102

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #2 on: January 05, 2015, 09:57:16 AM »
Much Vision!  +5% +5%

Offline Empirical1.1

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #3 on: January 05, 2015, 10:12:17 AM »
I think we should really push this theme in 2015
Especially with this same shit happening again and again:

http://www.bitstamp.net/
Quote
Bitstamp Service Temporarily Suspended

We have reason to believe that one of Bitstamp’s operational wallets was compromised on January 4th, 2015.

As a security precaution against compromises Bitstamp only maintains a small fraction of customer bitcoins in online systems. Bitstamp maintains more than enough offline reserves to cover the compromised bitcoins.

IN THE MEANTIME, PLEASE DO NOT MAKE DEPOSITS TO PREVIOUSLY ISSUED BITCOIN DEPOSIT ADDRESSES. THEY CANNOT BE HONORED!

Customer deposits made prior to January 5th, 2015 9:00 UTC are fully covered by Bitstamp’s reserves. Deposits made to newly issued addresses provided after January 5th, 2015 9:00 UTC can be honored.

Bitstamp takes our security and soundness very seriously. In an excess of caution, we are suspending service as we continue to investigate. We will return to service and amend our security measures as appropriate.

Bitstamp Team

 +5%

Offline svk

Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #4 on: January 05, 2015, 03:03:43 PM »
I think we should really push this theme in 2015

https://www.youtube.com/playlist?list=PLjgfpSQFJTLqbgHm8mkgPdD-ma7t0bRhK

Hopefully Toast got my message and will post this to redit tomorrow morning.

Very interesting episode, thanks!

This really made me realize the potential of Bitshares as a decentralized exchange with the help of gateways. Can we get Bitfinex or someone else to make a gateway already please?? :)
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Offline MrJeans

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #5 on: January 05, 2015, 03:59:14 PM »
I think we should really push this theme in 2015

https://www.youtube.com/playlist?list=PLjgfpSQFJTLqbgHm8mkgPdD-ma7t0bRhK

Hopefully Toast got my message and will post this to redit tomorrow morning.

I did not receive an email notifying me of this new video as I have received for the previous videos.

Offline pseudoscops

Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #6 on: January 05, 2015, 04:09:42 PM »
Well done Max and Dan. This video is an excellent example of how get the interest of Bitcoin diehards.

A positive attitude towards Bitcoin that shows how it can live in harmony alongside  and within the BitShares ecosystem. Over time one would expect that Bitcoiners will see the advantages of moving some holdings in to raw BTS or other BitAssets.

It's a good day to retweet and mention this URL in comments in light of the problems BitStamp are having today. I've already posted a link to the video on a Hacker News thread discussing the BitStamp freeze.

Offline santaclause102

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #7 on: January 05, 2015, 04:44:01 PM »
What really is the advantage of a decentralized exchange compared to say Bitstamp (in the light of the recent Bitstamp hack)? Gateways would also have to store BTC. And also have a hot wallet?

Offline xeroc

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #8 on: January 05, 2015, 04:48:44 PM »
What really is the advantage of a decentralized exchange compared to say Bitstamp (in the light of the recent Bitstamp hack)? Gateways would also have to store BTC. And also have a hot wallet?
yes .. bitstampUSD (IOU) have the same issue .. IF THERE wasn't the power of user-issued assets that allow a MASTER key to manipulate (freeze, withdraw, deposit, burn,...)  individual account balances .. :)

If a bitshares gateway gets hacked ... the gateway identifies those balances in time (critical) and freezes the IOUs
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline Rune

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #9 on: January 05, 2015, 05:22:37 PM »
What really is the advantage of a decentralized exchange compared to say Bitstamp (in the light of the recent Bitstamp hack)? Gateways would also have to store BTC. And also have a hot wallet?

I think ultimately we will see market making gateways become a lot more popular for crypto than IOU gateways. So you will simply send your bitcoin to the gateway that offers the highest rate in bitUSD. If you want to trade a lot you can find a btc -> bitBTC gateway and then trade bitBTC against bitUSD, however it might turn out that most liquidity goes to bitUSD market maker gateways so even large transactions can efficiently go through them.

IOU gateways will be excellent for fiat though.

Offline svk

Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #10 on: January 05, 2015, 05:57:00 PM »
What really is the advantage of a decentralized exchange compared to say Bitstamp (in the light of the recent Bitstamp hack)? Gateways would also have to store BTC. And also have a hot wallet?
yes .. bitstampUSD (IOU) have the same issue .. IF THERE wasn't the power of user-issued assets that allow a MASTER key to manipulate (freeze, withdraw, deposit, burn,...)  individual account balances .. :)

If a bitshares gateway gets hacked ... the gateway identifies those balances in time (critical) and freezes the IOUs

Unless I'm misunderstanding something the big difference is that the client funds are not as much at risk using a gateway, in that the client can freely move their holdings into bitAssets or BTS itself once they've received the IOU. The gateway also does not need to keep track of user balances, they only need to make sure their holdings of for example BTC is larger than or equal to the amount of BTCIOUs they've issued. As long as they can honor people wanting to cash out 1 BTCIOU -> 1 BTC, their reputation is intact and the value of the IOU will hold.

If the gateway gets hacked they may freeze the IOU asset, but that does mean anyone holding IOUs at that time may lose value. However another advantage here is that they can freeze the asset until the situation has been resolved, at which point they may once again be capable of honoring the cashing out.
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Offline xeroc

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #11 on: January 05, 2015, 06:11:49 PM »
there is no need to freeze ALL usser's accounts ... just the stolen funds .. unless they went through the decentralized exchange .. than things get complicated I think .. A maturation time for IOUs until they can be spend in the exchange might be useful to consider ...
Give BitShares a try! Use the http://testnet.bitshares.eu provided by http://bitshares.eu powered by ChainSquad GmbH

Offline santaclause102

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #12 on: January 05, 2015, 06:13:03 PM »
What really is the advantage of a decentralized exchange compared to say Bitstamp (in the light of the recent Bitstamp hack)? Gateways would also have to store BTC. And also have a hot wallet?
yes .. bitstampUSD (IOU) have the same issue .. IF THERE wasn't the power of user-issued assets that allow a MASTER key to manipulate (freeze, withdraw, deposit, burn,...)  individual account balances .. :)

If a bitshares gateway gets hacked ... the gateway identifies those balances in time (critical) and freezes the IOUs

Unless I'm misunderstanding something the big difference is that the client funds are not as much at risk using a gateway, in that the client can freely move their holdings into bitAssets or BTS itself once they've received the IOU. The gateway also does not need to keep track of user balances, they only need to make sure their holdings of for example BTC is larger than or equal to the amount of BTCIOUs they've issued. As long as they can honor people wanting to cash out 1 BTCIOU -> 1 BTC, their reputation is intact and the value of the IOU will hold.

If the gateway gets hacked they may freeze the IOU asset, but that does mean anyone holding IOUs at that time may lose value. However another advantage here is that they can freeze the asset until the situation has been resolved, at which point they may once again be capable of honoring the cashing out.

Quote
The gateway also does not need to keep track of user balances,
That is not a factor that influences the risk of loosing funds. Or is your argument that it becomes an easier task and the gateway can focus on that one task?

Quote
As long as they can honor people wanting to cash out 1 BTCIOU -> 1 BTC, their reputation is intact and the value of the IOU will hold.
The same for Bitstamp? They would not have to have holded trading today if a certain amount of coins would have been stolen and they would be confident that those coins could be recovered over time through tx fees again.

Quote
If the gateway gets hacked they may freeze the IOU asset, but that does mean anyone holding IOUs at that time may lose value. However another advantage here is that they can freeze the asset until the situation has been resolved, at which point they may once again be capable of honoring the cashing out.
Again I don't see a difference to Bitstamp.

Quote
the big difference is that the client funds are not as much at risk using a gateway, in that the client can freely move their holdings into bitAssets or BTS itself once they've received the IOU.
That seems like a real advantage! You can trade for BitUSD WITHIN your client. No need to open any other software or website.

Offline matt608

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Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #13 on: January 05, 2015, 07:10:59 PM »
Great episode!

If we pretend I'm a gateway, is this how it works?

I accept £100 to my bank account from a buyer who wants to buy bitGBP.

I issue issue 100 matt608GBP to the buyer - which is an IOU from me to the buyer for 100 GBP, an iouGBP - NOT ioubitGBP.

An order book is created in the BitShares client for matt608GBP/bitGBP

People who want to cash out of bitGBP into GBP buy my GBP iou.  To withdraw to their bank account means I send them £100 from my bank account. - is that correct?

So each gateway still has their own separate orderboook except its on the BitShares blockchain.

bitstamp doesn't issue "bitstamp bitUSD", they issue "bitstamp  iouUSD", then if someone buys it they can redeem it at the exchange for USD.

So it appears this means anyone who has achieved local regulatory approval can be a gateway? You could have lots of small gateways starting up in any country providing the person can use their bank account.

Can it all be done entirely within the BitShares client - no exchange website even needed?!  I could simply announce I am now a gateway and provide bank account deposit details on my wall on my BitShares account. People could start making GBP deposits. I issue them matt608GBP.  People who want to sell their bitGBP for GBP buy the IOU from my depositors.  They can then send me the IOU with a memo including their bank account details.  I send them GBP from my account.  If the person who bought the matt608GBP changed their mind and wanted to sell it back to GBP, they could send it back to me and I would send them 100 GBP from my bank account (minus a tiny exchange fee).

Voila.  An gateway can be launched without even coding anything new!

I have no plans to do this of course due not being able to use my bank account for this, but I'm just thinking theoretically around the world.  Any exchanges that already has completed the KYC + regulatory approval could start doing this without even having to do anything to their website.  They just create an account on BitShares and put up their bank account details on their BitShares account wall, issue an IOU and start trading.  They could optionally just add 1 page to their website displaying iou/bitasset order book if they wanted to.  Or they could even just have page telling users they are now a gateway for BitShares and direct them to download the client and visit their account where they will find the banking deposit details.

The only problem is to have regulatory approval they have to have your ID info which means the user would have to verify themselves on the gateways website first before trading, but thats no big deal.  It means all currently approved users of any exchange could trade like this, all an exchange has to do to become a BitShares gateway is make a BitShares account, issue an IOU and start trading.  No integration is even required.  Customers would just need an unique ID that ties them to their exchange account.  Simple.

Is my understanding correct?

Offline Xeldal

Re: BitSharesTV #5 2015: The year of the decentralized bitcoin exchange
« Reply #14 on: January 05, 2015, 07:50:39 PM »
What if a gateway only wants to provide a one way USD -> someAsset,   they wouldn't need to create a iou UIA right?  is that still considered a 'gateway' ? 

If localbitcoins sellers can exchange without meeting KYC requirements how does this differ from the above simple gateway?  Could not anyone with a bank account offer that immediately without any hoops?

I guess a localbitcoins example would use escrow and a gateway wouldn't ?


 

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