BitShares Forum
Main => General Discussion => Topic started by: Rune on November 23, 2014, 06:43:53 pm
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So I just listened to the mumble hangout and apparently this is going to be a thing (hopefully in 1.0?).
This is probably the biggest news since the merger, as it copies the core feature of ripple and makes it significantly easier for anyone to run a BTS/bitasset on-ramp. I think there could likely be a rally once the market realises the actual ramifications of this getting implemented in bitshares. IMO it is bigger than counterparty copying the ethereum scripting language.
More excited than ever for the future of BTS!
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I don't understand what are the ramifications, could you please enlight me?
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Now bter has 100+ BTC volume on BTS .
Imagine 1000+ people offers even 0.1 BTC quota to operate a small gate way in order to let BTC value in and out of the system, it would be more than bter's volume , and less risk (decentralized gateway group) .
It would easily multiple BTS volume with a lot small gateways .
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Now bter has 100+ BTC volume on BTS .
Imagine 1000+ people offers even 0.1 BTC quota to operate a small gate way in order to let BTC value in and out of the system, it would be more than bter's volume , and less risk (decentralized gateway group) .
It would easily multiple BTS volume with a lot small gateways .
+5%
Rune is on top of his stuff. I too was very very pumped about this...but I think many who were there were also quite pumped
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Yes. Listened to it yesterday and feel this is one more big step toward mass adoption.
Sent from my SM-G900T using Tapatalk
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Now bter has 100+ BTC volume on BTS .
Imagine 1000+ people offers even 0.1 BTC quota to operate a small gate way in order to let BTC value in and out of the system, it would be more than bter's volume , and less risk (decentralized gateway group) .
It would easily multiple BTS volume with a lot small gateways .
Who's going to trust this 1000+ people with their value?
As far as I understand with Ripple you need to trust the gateways, so I see no value in having a lot of small gateways with no reputation.
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The best way to figure out what this will mean for BTS is to research how ripple works.
The idea is that anyone who runs a BTS gateway can seamlessly issue IOU's in return for deposits they receive, and if the issuer of these IOUs is trustworthy then they will be worth their nominal value, and can be traded on the DEX (internal decentralized exchange) for bitassets, BTS, or even the IOUs of other gateways.
So if bter.com decides to become a CNY gateway it means that you can send them CNY and they will send you the IOU token bterCNY in return. Holding bterCNY in your bitshares wallet is as good as having CNY on the bter exchange, and on the DEX there will be bterCNY markets, such as bterCNY/BTS, bterCNY/bitCNY, or bterCNY/btc38CNY that function just like the bitasset markets we currently know (except no leverage/shorting). In addition to making the aggregate market a lot more transparent, it also means that people no longer have to deposit their BTS on to bter.com if they want to trade it for CNY, increasing security and reducing exchange centralization.
What makes this even more mindblowing is the fact that bitcoin public/private key pairs will soon be useable on the bitshares blockchain, meaning that you can send bitshares directly to bitcoin addresses, and the owner of the private key for that address will be able to use the coins if he runs the BTS client and has imported his private key into it. This enables extremely convenient onramp systems where you can send bitcoin to a gateway address (the bitcoin address of someone running a BTS gateway), and the gateway will instantly send you IOU BTC back to the bitcoin address you sent them from (remember that these IOU's are tokens that reside on the BTS blockchain). You can then instantly go to the bitshares DEX and trade the BTC IOU's for bitBTC, BTS, bitUSD, or whatever you want. BTS is then essentially directly integrated into bitcoin, and any bitcoin user who also runs the BTS node has instant access to all of BTS' features (almost as well integrated as counterparty).
The gateway system doesn't even need a website or anything like that, all it needs is a server running the gateway software and a public bitcoin address held by someone who can be trusted. There will probably be many delegates and prominent community members who set up gateways like this because it's going to be so easy to do, so we can reasonably expect to see big IOUBTC/BTS volume on the DEX with low spreads.
Once bitstamp begins to issue bitstampUSD as a BTS gateway (like they currently are a ripple gateway), then moon.
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then instantly go to the bitshares DEX and trade the BTC IOU's for bitBTC, BTS, bitUSD, or whatever you want. BTS is then essentially
This sounds interesting, but I'm a touch confused because a bitBTC is already an IOU for 1 BTC, so what are these other IOUs that you're talking about?
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then instantly go to the bitshares DEX and trade the BTC IOU's for bitBTC, BTS, bitUSD, or whatever you want. BTS is then essentially
This sounds interesting, but I'm a touch confused because a bitBTC is already an IOU for 1 BTC, so what are these other IOUs that you're talking about?
BitBTC is a collateralized IOU backed by the block chain.
BterBTC is an un-collateralized IOU backed by the issuer.
I hope to use this gateway function to bootstrap price discovery on Sparkle by using the built in exchange.
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Wouldnt the on off ramps be considered money transmitters and thus be liable to regulations? They can only be trusted if they open a registered company and put their neck on the line ofcourse making profit for the ramp as a business. I wouldnt trust a community member by his her word we seem that movie too many times with bitcoin early days
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Wouldnt the on off ramps be considered money transmitters and thus be liable to regulations? They can only be trusted if they open a registered company and put their neck on the line ofcourse making profit for the ramp as a business. I wouldnt trust a community member by his her word we seem that movie too many times with bitcoin early days
A fiat gateway will absolutely need to be licensed. We'll probably only see fiat gateways that are either crypto exchanges or perhaps eventually banks. BTC gateways can be anonymous so they cannot really be prosecuted. Check out the companies that are ripple gateways now, they will probably be the first we try to get on board as fiat gateways since the software they already use will be very similar to ours. Thinking about it, perhaps it will even be possible for us to make software that basically piggybacks off ripple in a way that allows us to use all their gateways to let the end user instantly convert rippleIOUs to BTS network tokens in what appears as a single step.
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Wouldnt the on off ramps be considered money transmitters and thus be liable to regulations? They can only be trusted if they open a registered company and put their neck on the line ofcourse making profit for the ramp as a business. I wouldnt trust a community member by his her word we seem that movie too many times with bitcoin early days
A fiat gateway will absolutely need to be licensed. We'll probably only see fiat gateways that are either crypto exchanges or perhaps eventually banks. BTC gateways can be anonymous so they cannot really be prosecuted. Check out the companies that are ripple gateways now, they will probably be the first we try to get on board as fiat gateways since the software they already use will be very similar to ours. Thinking about it, perhaps it will even be possible for us to make software that basically piggybacks off ripple in a way that allows us to use all their gateways to let the end user instantly convert rippleIOUs to BTS network tokens in what appears as a single step.
Ripple is not anonymous if you are dealing with any major gateway IOUs. There is a reason Ripple is gaining traction with the banks, it allows the banks to comply with all laws and KYC.
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Just to be clear, if I send CNY to bter, I then transfer the bterCNY from my Bter web-wallet into my BitShares wallet ?
So this cuts out the step of having to buy BTS/bitCNY from inside bter - the volume on bter might be relatively thin compared to the decentralized exchange.
Sounds great. Question is what did Ripple have to do to get Bitstamp to become a Ripple gateway.
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Question is what did Ripple have to do to get Bitstamp to become a Ripple gateway.
As far as I know bitstamp is already a ripple gateway ...
Sent from my ALCATEL ONE TOUCH 997D
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Yeah what I meant was what steps do we have to copy...
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Why not just send bitUSD/bitBTC back to the sending address instead of gateway's user issued asset (which adds unnecessary confusion)?
I see this new feature in 4.25 a great preparation for onramp services! --> simply send fiat/btc to a "gateway" then u can get ur bts/bitUSD/bitGLD !!
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So this cuts out the step of having to buy BTS/bitCNY from inside bter - the volume on bter might be relatively thin compared to the decentralized exchange.
This leads to the question: Why would exchanges want to do this if they profit from transaction fees?!
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So this cuts out the step of having to buy BTS/bitCNY from inside bter - the volume on bter might be relatively thin compared to the decentralized exchange.
This leads to the question: Why would exchanges want to do this if they profit from transaction fees?!
The exchange fees will disappear but they can make up for that by having higher withdrawal fees. I guess that's how ripple currently does it. Using gateway IOUs will not actually increase liquidity, because you will still have segregated markets for bterCNY, btc38CNY and so on. It removes the need for depositing the BTS tokens they are traded against onto the exchange though, which is a huge deal that dramatically decreases exchange centralization.
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So this cuts out the step of having to buy BTS/bitCNY from inside bter - the volume on bter might be relatively thin compared to the decentralized exchange.
This leads to the question: Why would exchanges want to do this if they profit from transaction fees?!
Exchanges will make more money as arbitrages possibilities are increased. How long does it take you to transfer USD, CNY, EUR from on exchange to another. This can be instant now.
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Now bter has 100+ BTC volume on BTS .
Imagine 1000+ people offers even 0.1 BTC quota to operate a small gate way in order to let BTC value in and out of the system, it would be more than bter's volume , and less risk (decentralized gateway group) .
It would easily multiple BTS volume with a lot small gateways .
Who's going to trust this 1000+ people with their value?
As far as I understand with Ripple you need to trust the gateways, so I see no value in having a lot of small gateways with no reputation.
Mtgox had reputation . Now ...
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There is another important advantage of IOU gateways being built into the blockchain: You can build a gateway without having the risk of storing any of your user's crypto funds. Whenever the gateway's fiat bank account receives a deposit, it issues an IOU to the user's BitShares wallet. The user is then responsible for keeping his own IOU, and he can trade it on the blockchain however he wants.
This can make MtGox collapses a thing of the past.
Am I right in this assessment?
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There is another important advantage of IOU gateways being built into the blockchain: You can build a gateway without having the risk of storing any of your user's crypto funds. Whenever the gateway's fiat bank account receives a deposit, it issues an IOU to the user's BitShares wallet. The user is then responsible for keeping his own IOU, and he can trade it on the blockchain however he wants.
This can make MtGox collapses a thing of the past.
Am I right in this assessment?
No. IOU are always subject to Goxing unless there is on chain collateral. Which I guess any gateway could do... the problem is this would limit the gateways ability to take deposits because they would have to buy some BTS for every IOU they issued.
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There is another important advantage of IOU gateways being built into the blockchain: You can build a gateway without having the risk of storing any of your user's crypto funds. Whenever the gateway's fiat bank account receives a deposit, it issues an IOU to the user's BitShares wallet. The user is then responsible for keeping his own IOU, and he can trade it on the blockchain however he wants.
This can make MtGox collapses a thing of the past.
Am I right in this assessment?
No. IOU are always subject to Goxing unless there is on chain collateral. Which I guess any gateway could do... the problem is this would limit the gateways ability to take deposits because they would have to buy some BTS for every IOU they issued.
Thanks, but I dont quite understand. I thought the collateral behind a gateway's IOUs is the fiat that the gateway receives. Why would a BitShares gateway need to hold collateral on the blockchain? I dont think there has ever been a single crypto exchange that went bust because their bank account got hacked - just their crypto funds.
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There is another important advantage of IOU gateways being built into the blockchain: You can build a gateway without having the risk of storing any of your user's crypto funds. Whenever the gateway's fiat bank account receives a deposit, it issues an IOU to the user's BitShares wallet. The user is then responsible for keeping his own IOU, and he can trade it on the blockchain however he wants.
This can make MtGox collapses a thing of the past.
Am I right in this assessment?
The gateway could run away with collateral.
No. IOU are always subject to Goxing unless there is on chain collateral. Which I guess any gateway could do... the problem is this would limit the gateways ability to take deposits because they would have to buy some BTS for every IOU they issued.
Thanks, but I dont quite understand. I thought the collateral behind a gateway's IOUs is the fiat that the gateway receives. Why would a BitShares gateway need to hold collateral on the blockchain? I dont think there has ever been a single crypto exchange that went bust because their bank account got hacked - just their crypto funds.
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There is another important advantage of IOU gateways being built into the blockchain: You can build a gateway without having the risk of storing any of your user's crypto funds. Whenever the gateway's fiat bank account receives a deposit, it issues an IOU to the user's BitShares wallet. The user is then responsible for keeping his own IOU, and he can trade it on the blockchain however he wants.
This can make MtGox collapses a thing of the past.
Am I right in this assessment?
No. IOU are always subject to Goxing unless there is on chain collateral. Which I guess any gateway could do... the problem is this would limit the gateways ability to take deposits because they would have to buy some BTS for every IOU they issued.
Thanks, but I dont quite understand. I thought the collateral behind a gateway's IOUs is the fiat that the gateway receives. Why would a BitShares gateway need to hold collateral on the blockchain? I dont think there has ever been a single crypto exchange that went bust because their bank account got hacked - just their crypto funds.
Think Cyprus. A user deposits 100,000 euros with the gateway and receives on-chain IOUs for those euros. Overnight the government steals all euros in the gateway. The on-chain IOUs are now worthless. Fiat is subject to Goxing just as crypto is. The best solution is on-chain collateral. The user has to have full control over the IOUs AND collateral to prevent goxing.
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cool. also I'm waiting for bitUSD to come to the ripple ledger. but maybe a bitAsset that tracks oil price would have more demand on the ripple ledger. since.. they don't have oil IOU's yet.
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Ok apart from fiat goxing, issuing IOUs on the blockchain makes development of onramps a lot easier, because the onramp doesn't have to store any BTS. All the onramp does is issue and cancel IOUs on the blockchain, which users trade from their own personal wallet. Compare this with a currency like Bitcoin that doesnt support blockchain IOUs, which requires that an exchange store both the fiat and the crypto.
At least that much is true correct?
If I issue IOUs, can the holder make an order to swap for BTS/BitUSD/whatever by paying fees from the IOU? The user wouldnt have any BTS at that point to pay the fee with. And does that mean that holding the IOU would accumulate yield from other user's transaction fees ?
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Ok apart from fiat goxing, issuing IOUs on the blockchain makes development of onramps a lot easier, because the onramp doesn't have to store any BTS. All the onramp does is issue and cancel IOUs on the blockchain, which users trade from their own personal wallet. Compare this with a currency like Bitcoin that doesnt support blockchain IOUs, which requires that an exchange store both the fiat and the crypto.
At least that much is true correct?
If I issue IOUs, can the holder make an order to swap for BTS/whatever by paying fees from the IOU? The user wouldnt have any BTS at that point to pay the fee with. And does that mean that holding the IOU would accumulate yield from other user's transaction fees ?
Regarding the fees, that is an interesting question. My intuition tells me that it isn't possible because that would make a DDOS attack by a gateway issuing infinite IOUS to pay for spam transactions possible. But if you can't pay for transactions with IOUs then it becomes inconvenient to use them as an on ramp... Maybe there is some inbuilt anti-spam system that detects if IOUs are issued for DDOS purposes. Also it should be up to the IOU issuer whether the IOU fees go to yield or are simply burned. If they are burned it can be a source of revenue for the issuer since they don't have to cover the burned IOUs and can take the collateral for themselves.
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Regarding the fees, that is an interesting question. My intuition tells me that it isn't possible because that would make a DDOS attack by a gateway issuing infinite IOUS to pay for spam transactions possible. But if you can't pay for transactions with IOUs then it becomes inconvenient to use them as an on ramp... Maybe there is some inbuilt anti-spam system that detects if IOUs are issued for DDOS purposes. Also it should be up to the IOU issuer whether the IOU fees go to yield or are simply burned. If they are burned it can be a source of revenue for the issuer since they don't have to cover the burned IOUs and can take the collateral for themselves.
The gateway itself holds BTS, and they require that to pay for transaction fees whenever they issue/cancel an IOU.
But yes the transaction fee payed by the holder could simply be burned and kept as revenue by the gateway. As long as this is transparent.
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The gateway could offer the service of converting to btsx at 75% the feed price.
Trx fees for IOU are paid in bts.