We have bitBTC, OPENBTC, METAEX.BTC, TRADE.BTC and many other potential future BTC assets. or bitCNY and bitcrab'sCNY, etc What if we could merge them in the same orderbook?
The problem here is one can just print his asset and create fake BTC right? Well, to do this we could have certain criteria like providing a separate wallet address for the BTC on our exchange. Once we have this public address couldn't we just scan it and if the balance has a balance for example 2% to 5% lower than the assets issued on our chain, the committee account would automatically have power over that asset to prevent abuse.
Something like also needing the committee account permission to authorize the issue of more of that same asset. This way we could have a guarantee that the assets are backed in the blockchain and exist.
The only thing that could happen would be having the owner take away all the real assets and let the UIAs on our chain be useless but that can already happen. We assume it won't because we trust these entities.
So whoever would want to apply their asset to have this propriety and join the merged orderbook would need to have the committee to approve it via vote.
This way we would have the shared order books with more market depth and liquidity.
Only thing I don't know is how would our chain monitor the assets exist on their real chain (ie confirm X amount of BTC is on the given address on the bitcoin blockchain). Unless witnesses and/or the committee account would do that too.
So, in practice:
- Every BTC.UIA would appear simply as BTC to the users. Seeing it is a UIA can put some people off.
- UIAs would be merged on the same orderbook
- For this is needed approval from the committee to get someone of trust
- On the description of the UIA there would be the address for a single wallet holding the exact same funds as the amount issued
- This address would constantly be scanned, either each block or via committee/witness members
- The fact the address is on the UIA description would allow anyone to audit it
- If there's a small percentage gap between original address of real assets and the amount issued, committee account would be required to give permission for any operation and other possible consequences (orders being cancelled, etc)
- The fact the amounts are the same proves each asset is backed by the real deal.
- This would allow anyone to audit any exchange or service
- This would prevent any service running on a Fractional Reserve
- This would create shared order books
- This could increase market depth
- This could increase liquidity
- This could create healthier markets
- This could create better conditions for traders and services and consequently attract more.
Imagine this doesn't have any loopholes which probaby has. In the future with the proper interface someone would create an asset and choose to peg it to btc, ltc, etc. They would only need to copy/paste the original address to the board, it would be checked the amount and only that amount would allow to be issued. This of course if it was previously approved by the committee so that we only have trustworthy people with a good reputation. After approval we could even demand a fee to be paid and make money out of it since services would benefit from this feature.
Note:
This was just some brainstorm during a shower. Bare with me. I just felt the urge to post this before i forgot about it and didn't really think this through.