BitShares Forum
Main => General Discussion => Topic started by: cass on June 17, 2015, 09:16:00 am
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http://cointelegraph.com/news/114579/danish-ccedk-exchange-announces-real-time-transparent-order-books-proof-of-solvency
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+5% .. nice selling points in the headline
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First step, exchanges, next step, banks!
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Where does it explain how it works (proving solvency)?
I would understand how it works if the order book was in BitUSD / cryptoassets?
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Where does it explain how it works (proving solvency)?
I would understand how it works if the order book was in BitUSD / cryptoassets?
Good catch ... exchanges that offer a IOU cannot easily proof solvency ... technically they could issue any amount of IOUs .. unless they do multisig/corporate ids with a 3rd party accounting firm..
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Where does it explain how it works (proving solvency)?
I would understand how it works if the order book was in BitUSD / cryptoassets?
Good catch ... exchanges that offer a IOU cannot easily proof solvency ... technically they could issue any amount of IOUs .. unless they do multisig/corporate ids with a 3rd party accounting firm..
exactly...
let's go for a fully decentralized / counterparty free exchange with bitassets :)
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Where does it explain how it works (proving solvency)?
I would understand how it works if the order book was in BitUSD / cryptoassets?
Good catch ... exchanges that offer a IOU cannot easily proof solvency ... technically they could issue any amount of IOUs .. unless they do multisig/corporate ids with a 3rd party accounting firm..
exactly...
let's go for a fully decentralized / counterparty free exchange with bitassets :)
That however has two difficulties:
a) legal issues because you cannot 'control' bitaasets as opposed to IOUs and
b) security concerns. when you get hacked you have no way to halt markets and get back the funds (which again is solved by the control you have over IOUs)
So IMHO it makes sense to issue an IOU and proof solvency differently .. e.g. by a third party that has read acceas to you bank accounts. Also, the amount of issued IOUs is known to the blockchain/smartchain
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Where does it explain how it works (proving solvency)?
I would understand how it works if the order book was in BitUSD / cryptoassets?
Good catch ... exchanges that offer a IOU cannot easily proof solvency ... technically they could issue any amount of IOUs .. unless they do multisig/corporate ids with a 3rd party accounting firm..
exactly...
let's go for a fully decentralized / counterparty free exchange with bitassets :)
That however has two difficulties:
a) legal issues because you cannot 'control' bitaasets as opposed to IOUs and
b) security concerns. when you get hacked you have no way to halt markets and get back the funds (which again is solved by the control you have over IOUs)
So IMHO it makes sense to issue an IOU and proof solvency differently .. e.g. by a third party that has read acceas to you bank accounts. Also, the amount of issued IOUs is known to the blockchain/smartchain
a) It might have even less legal issues because you merely 'sell' USD für BitUSD. No customer funds are held then in USD.
b) the question here is: do you really hold btc when you sell bitbtc for btc? you (the exchange) need to hold some btc probabaly for your cash flow. hmmm
maybe an exchange could offer both: counterparty risk free (bitassets) trading and IOU trading?
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another issue when trading bitassets directly is that the exchanges has to do order matchimg and store balamces .. which could be easier handled by the dex ..
I guess its a matter of juristiction and costumer's preferences
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another issue when trading bitassets directly is that the exchanges has to do order matchimg and store balamces .. which could be easier handled by the dex ..
I guess its a matter of juristiction and costumer's preferences
why is that?
order matching should be no different whether the order book is a) bitasset / bitasset or b) IOU/UIA / IOU/UIA
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There is no pair USD(fiat):bitUSD in the DEX .. as a gateway you can either go FIAT->IOU or FIAT:bitAsset ... the latter requires the exchange to do the orderbooks (thats how ccedk is doing it atm)
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There is no pair USD(fiat):bitUSD in the DEX .. as a gateway you can either go FIAT->IOU or FIAT:bitAsset ... the latter requires the exchange to do the orderbooks (thats how ccedk is doing it atm)
to offer fiat:bitasset the exchange would have to buy bitassets and then sell them to the user. after the user has them, he can trade a paid like bitusd/bitbtc (order book managed by bitshares network) for example. No?
BTW, Security concerns are at least as big when the exchange does IOU/IOU because crypto currencies are stored by the exchange equal to the amount of IOUs issued. When the exchange does BitAsset/BitAsset the exchange just has to hold enough crypto currency for daily / weekly cash flow (enough to pay out those that want to cash out crypto currencies).
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its not the exchange that sella bitUSD .. its other people that trade with each other ... but what you mention would be yet another use-case .. yep .. absolutely possible ..