Author Topic: Counter Party Risk  (Read 1361 times)

0 Members and 1 Guest are viewing this topic.

Offline Troglodactyl

  • Hero Member
  • *****
  • Posts: 960
    • View Profile
Thanks. How do we know a node won't cheat on the market engine if its not checked by the delegates?
It is checked by the delegates, in that the delegates should never include invalid transactions in a block.  If a delegate does include invalid transactions created by someone cheating, all other full nodes should reject and ignore that block.

Checking block validity isn't a special role exclusive to delegates, it's performed by all full nodes. The delegates just bundle groups of pending transactions into blocks and sign them.

Offline bitmarley

  • Full Member
  • ***
  • Posts: 135
    • View Profile
Thanks. How do we know a node won't cheat on the market engine if its not checked by the delegates?

Offline pc

  • Hero Member
  • *****
  • Posts: 1530
    • View Profile
    • Bitcoin - Perspektive oder Risiko?
  • BitShares: cyrano
I don't know exactly how accurate it is but this is what I understand. .

In bitshares the 101 Delegates are voted in to execute the code for a bitAsset market engine which manages the market by:
keeping accurate price feeds (USD,CNY, EURO, GOLD, BTC),
creating bitAsset units against shorting trades,
signing bitAsset transfers,
expiring the short side of trades,
and triggering margin calls if collateral is squeezed by the price algorithm

It's even simpler than that... in a way. Delegates provide price feeds and make sure that only transactions conforming to the blockchain rules are included in blocks. That's all.

The market engine runs inside every single node.
Bitcoin - Perspektive oder Risiko? ISBN 978-3-8442-6568-2 http://bitcoin.quisquis.de

Offline bitmarley

  • Full Member
  • ***
  • Posts: 135
    • View Profile
I don't know exactly how accurate it is but this is what I understand. .

In bitshares the 101 Delegates are voted in to execute the code for a bitAsset market engine which manages the market by:
keeping accurate price feeds (USD,CNY, EURO, GOLD, BTC),
creating bitAsset units against shorting trades,
signing bitAsset transfers,
expiring the short side of trades,
and triggering margin calls if collateral is squeezed by the price algorithm

This decentralizes the market administration which means traders do not have counter party risk while trading. So instead of only avoiding counter party risk while sitting in a basic account, with bitshares account holders also avoid counter party risk while trading bitAssets. Since the bitAssets are "Assets For Difference"* their value tracks external world assets. So bitAssets act as crypto currencies with values linked to external markets.
 
Bitcoin can do multi-signature accounts but it doesn't have such market engine features natively. I read assumptions about bitshares that seem unaware of the absence of counter party risk while trading and holding bitAssets. It is important when comparing with bitcoin, Tether, NuBits, etc to explain this particular feature as it's a very unique and valuable.   

*bitAssets should not be called contracts or CFDs because a contract implies something is unfinished and so obligations exist that still need to be performed. Since bitAssets are automated algorithms they are already completed when they are transferred and do not depend upon a counter party to perform anything further.