The Winklevoss twins will someday have their ETF for Bitcoin. That kind of ETF has a very high risk profile - Bitcoin has collapsed 64% this year.

I think a combination of BitUSD and BTS could be a much more attractive proposition for a safe ETF. You could make it a combination of 90% BitUSD to capture the 5-10% yield, and the rest BitShares. Even if BitShares collapses 50%, the fund would still break even on the yield. That's the kind of safe investment that many people would be interested in.

There are companies out there that help you bring an ETF to market quickly, for example http://www.etfcanvas.com/ if anyone wants to do it.

Good idea?

I know - controversial statement.

So as I was dreaming about BitShares at work today, I started to worry about all those exchanges that would vote themselves as paid delegates thereby freeloading off the network without contributing anything in return.

Then I realized that this is could be a great way to incentive more exchanges to actually provide BTS. According to CMC, there still isnt a non-Chinese exchange with greater than 1% of the BTS trading volume.

We could actively reach out to the big non-Chinese exchanges and explain to them how they will get an immediate reward for adding BTS. Im thinking of Cryptsy etc.

Been doing more thinking about escrow:

Running a localbitusd.com type website would be a central point of failure and a target for regulators. We would be better served by multiple trusted users who can facilitate escrow as opposed to a single centralized website.

Fortunately all the components needed to do this properly will soon (I think) be in the toolkit.

Bytemaster has confirmed that there will be an escrow transaction type requiring 2 of 3 keys to send funds. Stan has also mentioned that there will be secure messaging builtin as well.

So I think we should leverage these two components to allow users to list BitUSD buy/sell adverts directly inside the client. These adverts could be created by Bitmessage-style broadcast messages, as they dont need to be stored forever on the blockchain, and because a new user does not yet have any funds.

Trusted members of the community can broadcast that they are willing to facilitate escrow, and BitUSD sellers can include their preferred escrow party in their sell advert. A new BitShares user then loads up the client for the first time and sees a safe and easy way to get his first BitUSD quickly.

This ties in nicely with the builtin reputation system that was talked about a while back.

What do you think? Is this the best way to do it?

Blockchains cannot control altcoins from other blockchains, which is why we still need to deposit altcoins at centralized exchanges to trade between them. In return the centralized exchange gives us an IOU for our deposit, and we have to trust that the exchange is honest and competent. These exchanges rarely insure their users' deposits with an equivalent value of something else, so if they do go tits up then there is no way to compensate the users.

Well here is a way to fix that, and add even more value to BitShares X.

Users of BitSharesX could register to be custodians of altcoin deposits. They would be required to hold 200% of the equivalent BitAsset to the altcoin. For example if a custodian holds 20 BitBTC, he can be trusted to hold 10 Bitcoins worth of user deposits. Once a custodian has registered that 20 BitBTC as collateral, the system can accept Bitcoin deposits directly from users. There would have to be a 3-way escrow system in the event of the custodian and depositer not agreeing.

Once a deposit has been recorded, the custodian's BitBTC is locked into the system until it is no longer required to insure against deposits. Users who own BitBTC can request that it be redeemed in return for a withdrawal of real Bitcoin. Withdrawals of Bitcoin will reduce the custodian's collateral requirements and allow them to get their BitBTC back if they wish. BitBTC is now not just a derivative, its an IOU for real Bitcoin.

This is the beautiful bit: if a custodian does mess up and lose customer deposits, his 200% BitBTC collateral can simply be claimed for compensating the Bitcoin IOU holder. BitSharesX then becomes the world's only provably insured altcoin exchange. Deposits can also be stored by multiple custodians, the more the merrier.

We could even have a frontend website similar to PeerTracks so that the user can trade altcoins without even knowing that he is actually using a blockchain.

Is this the nail in the coffin of centralized altcoin exchanges ?

So I took the plunge today and bought my first BitUSD.

I bought 5000 BitUSD and the client crashed after pressing Confirm. I restarted the client and the trade was matched successfully. I then wanted to do the same trade at the same price of 40BTSX/USD, and sure enough the client crashed after confirming again.

After restarting it showed again that I sent another 200000 BTSX to the market, but that it wasnt yet matched. I then pressed Ok to resetting the database.

On my other machine which is already synced (but without any wallet) the market shows that 210000 shares were traded (which was my first one), but I cant see any open order on the buy side for the second order.

I guess I will have to wait another hour my wallet to resync to find out what actually happened.

Crashing when I confirm a trade doesnt inspire confidence.

Right now the only market with any liquidity is BitUSD. We keep claiming that BTSX is this great exchange that gives Bitcoiners a safe way to go long and short on BTC, but until there is liquidity in BitBTC then this is a tough sell.

SOLUTION: we should all be running the market maker bot with a portion of our shares, on as many markets as possible. As soon as Bytemaster makes a push for this Im running it!!!

Maybe that is the best bit of marketing any of us can do: run market maker bots.

Im running 0.4.20 since about 30 minutes ago, and its taken that long to sync 5 days worth of blocks - its still not finished