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Offline speedy

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Convincing a Bitcoin exchange to add BitShares
« on: January 24, 2015, 09:47:40 PM »

I met the head of a UK Bitcoin exchange today and I started talking about how BitShares is something of long term value, because its a profitable business model implemented on a blockchain that will eventually reward its shareholders with dividends instead of inflation etc etc. He said long term value is a must-have for him to consider adding it.

I think I made a good case today, and he's a really cool guy so Im about to write an email to propose helping out with becoming a gateway, but I was just wondering first:

-Is issuing a gateway IOU inside BTS as profitable for an exchange as just charging the usual 1% fee on every trade made internally?
-Would it be an easier sell to just ask them to trade BTS on their own exchange first? Then they can charge more fees.
-I was thinking of sending a link to this BTS TV episode: https://www.youtube.com/watch?v=TtCVRIwcBYU Good idea?

Feel free to suggest any other links.

Offline robrigo

Re: Convincing a Bitcoin exchange to add BitShares
« Reply #1 on: January 24, 2015, 09:56:14 PM »
I met the head of a UK Bitcoin exchange today and I started talking about how BitShares is something of long term value, because its a profitable business model implemented on a blockchain that will eventually reward its shareholders with dividends instead of inflation etc etc. He said long term value is a must-have for him to consider adding it.

I think I made a good case today, and he's a really cool guy so Im about to write an email to propose helping out with becoming a gateway, but I was just wondering first:

-Is issuing a gateway IOU inside BTS as profitable for an exchange as just charging the usual 1% fee on every trade made internally?
-Would it be an easier sell to just ask them to trade BTS on their own exchange first? Then they can charge more fees.
-I was thinking of sending a link to this BTS TV episode: https://www.youtube.com/watch?v=TtCVRIwcBYU Good idea?

Feel free to suggest any other links.

Some benefits of being a gateway:

- Build more trust in clientele because they can follow the IOU on the blockchain.
- Ability to market themselves as the first bitshares gateway to implement fiat (if they are a fiat <=> crypto exchange).
- Less overall risk because centralized servers aren't holding all of the private keys, users are.

Cons:

- Fees are presumably less for gateways, because the orderbook fees are relegated to the blockchain. If they offer a fiat onramp they could be charging fees between fiat and crypto though, like Coinbase or Circle.

To answer your question, I think a gateway is much more valuable then just listing BTS. But having them list BTS could still be a minor win. Get them to start slow and then in the future they could evolve into a gateway. Which exchange is it if you don't mind?

Offline bitmarket

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Re: Convincing a Bitcoin exchange to add BitShares
« Reply #2 on: January 24, 2015, 10:03:36 PM »
1. By issuing IOU's you can make as much margin as you want.  you send me $100 of fiat and I will issue you  $95 of IOU.

2. But that might be less palatable that taking a small percentage of each trade for consumers.  SO I believe issuers of IOU's can also levy a fee on each trade of their IOU's.  Thus perfectly replicating the revenue models of existing exchanges. 

I am 100% confident point 1 is true.  I am 98% confident point 2 is true.  Perhaps a dev can confirm for me.
Host of BitShares.TV and Author of BitShares 101

sumantso

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Re: Convincing a Bitcoin exchange to add BitShares
« Reply #3 on: January 24, 2015, 10:07:10 PM »
1) Would prefer if they list BitAssets, at least a few choice ones.

2) Suggest them to add BitFiat as deposit option. It allows them to become a pseudo fiat exchange and not worry about licensing and regulations. It will allow them to capture arbitrage volume. For instance, they can get traders trying to arbitrage between CNY markets on Btc38 and corresponding pairs on their exchange.

Offline speedy

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Re: Convincing a Bitcoin exchange to add BitShares
« Reply #4 on: January 24, 2015, 11:00:33 PM »
Thanks for the suggestions guys. There's actually loads of options to choose, all of which are great for us. Ive written my email and sent that great TV episode as well as http://bitsharesblocks.com/assets/market which shows how much buzzing activity there is. Fingers crossed.

Offline Gentso1

Re: Convincing a Bitcoin exchange to add BitShares
« Reply #5 on: January 26, 2015, 02:28:46 PM »
Thanks for the suggestions guys. There's actually loads of options to choose, all of which are great for us. Ive written my email and sent that great TV episode as well as http://bitsharesblocks.com/assets/market which shows how much buzzing activity there is. Fingers crossed.

Is this a crypto to crypto exchange or do the have a way to deposit and withdraw fiat? It matter's because if it is crypto to crypto you should talk to them about bit assets as a way to accept fiat without regulation. If it is a fiat exchange UIA is the way to go.

Offline Rune

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Re: Convincing a Bitcoin exchange to add BitShares
« Reply #6 on: January 26, 2015, 03:50:49 PM »
An exchange of any real size is not gonna bother becoming a gateway on a coin as tiny as ours with our tiny internal exchange volume. Afaik the light client isn't even going to support DEX trading so becoming a gateway will likely bring close to no volume as people will 99% of traders will prefer using centralized exchanges rather than downloading a full node.

A better option is to pitch them BTC/bitasset pairs as a way to allow their clients to hedge their bitcoin holdings without going into fiat. We can organize market making and give people low spreads and thus easy access.

Offline matt608

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Re: Convincing a Bitcoin exchange to add BitShares
« Reply #7 on: January 26, 2015, 04:45:44 PM »

A better option is to pitch them BTC/bitasset pairs as a way to allow their clients to hedge their bitcoin holdings without going into fiat. We can organize market making and give people low spreads and thus easy access.

Is BTC/bitasset or fiat/bitasset better?

Offline Riverhead

Re: Convincing a Bitcoin exchange to add BitShares
« Reply #8 on: January 26, 2015, 04:52:54 PM »

A better option is to pitch them BTC/bitasset pairs as a way to allow their clients to hedge their bitcoin holdings without going into fiat. We can organize market making and give people low spreads and thus easy access.

Is BTC/bitasset or fiat/bitasset better?
First BTC then fiat once critical mass is reached.

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Offline Gentso1

Re: Convincing a Bitcoin exchange to add BitShares
« Reply #9 on: January 26, 2015, 05:05:46 PM »

A better option is to pitch them BTC/bitasset pairs as a way to allow their clients to hedge their bitcoin holdings without going into fiat. We can organize market making and give people low spreads and thus easy access.

Is BTC/bitasset or fiat/bitasset better?
First BTC then fiat once critical mass is reached.

Sent from my Timex Sinclair
This is a good point.

Bitasset's are our bread and butter. If these can gain traction on external exchanges makes it easier to pitch them to a gateway.

 

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