My failed attempt at trying to explain BitShares and OL to C-CEX. Help needed.

[Akado]

Maybe with BitShares that wouldn't happen, assuming their argument can even be considered legit..
https://www.reddit.com/r/Bitcoin/comments/48dcm9/cexio_seems_to_be_suffering_from_some_kind_of/

Another one

Likely a BTC issue. I don't think BitShares is able to help in this case.

While that might be true, with BitShares you would get multiple bridges to send your funds to and withdraw them, you wouldn't be dependent on one single entity not being able to release your coins.

If the problem was with the Bitcoin blockchain, no one from any other exchange would be able to withdraw their coins at this very moment and panic would start. This is something CEX.io specific.

[abit]

Maybe with BitShares that wouldn't happen, assuming their argument can even be considered legit..
https://www.reddit.com/r/Bitcoin/comments/48dcm9/cexio_seems_to_be_suffering_from_some_kind_of/

Another one

Likely a BTC issue. I don't think BitShares is able to help in this case.

[Akado]

Maybe with BitShares that wouldn't happen, assuming their argument can even be considered legit..
https://www.reddit.com/r/Bitcoin/comments/48dcm9/cexio_seems_to_be_suffering_from_some_kind_of/

Another one

[Akado]

See this interesting reply by Kraken

https://www.reddit.com/r/Bitcoin/comments/41vhzz/im_jesse_powell_cofounder_ceo_at_kraken_ama/cz5ijoz

"n the future, we'd like to enable trading without needing to take complete custody of the user's coins, possibly through a separate multisig wallet for each user, in which Kraken only controls 1/3 keys."

Could this something around these lines be the solution?

Also...
https://www.reddit.com/r/Bitcoin/comments/41vhzz/im_jesse_powell_cofounder_ceo_at_kraken_ama/cz5fv26

"No plans at the moment but I don't think more consolidation would be a bad thing. We are open to acquiring more exchanges, and open to being acquired."

Murderistic told us they wouldn't deal with BitShares, ever, however, maybe someday in the future we might be able to acquire it  Let's see BTS reach a higher marketcap and make a hostile takeover.

[abit]

Thank you @Stan, the referral program makes sense for the smaller entities here. But it requires that some percentage of UIA trading fees go to the referral program. UIA issuers and referrers do have arguments about this.

In regards to the EBA concept, imo it somehow conflicts with shared order book concept. From 2 or more member exchanges which have similar sizes, you can only get EBAs OR shared order book, not both. Smaller exchanges can adopt EBAs issued by big ones and share their order book though, like USD. Smaller ones can also united together and issue another EBA like EUR (big ones can united together as well).

So in conclusion we can give out two choices to targeted exchanges (which are our potential partners):
1. Adopt EBA's issued by existed partners(or maybe a union of some partners), and get shared order book,
2. Issue their own EBA's and compete with others.
To promote the first one we need liquidity, to promote the second one need user base.

[Stan]

An issue of shared order book strategy just came to my head. In short, if we try to get small exchanges adopt BitShares first, we will probably harder to get the big ones.

Say if we have already 3 small exchanges happily operating on top of BitShares. One day, come in another big exchange, which is bigger than the combination of the 3 small ones, guess what will happen? I guess, either the small ones be unhappy that some customers may go to trade with the big one, or the big one will be unhappy that it have to accept tokens issued by the small ones and/or have to ask the small ones for approval when need to issue shared tokens / withdraw from shared collateral. Will this cooperation schema succeed?

Anyway, at least the small ones should be able to survive at very first. When we're getting bigger and bigger, I don't know if the small ones can still survive.

Thoughts?

Presumably the smaller exchanges have some strategy for getting folks to sign up from some other universe (national demographic, affinity group, marketing twist, etc.)  Otherwise why start a new exchange?  They surely aren't trying to compete on initial liquidity. 

By getting there first, the smaller exchanges have a chance to be the referrer for people who also use the bigger exchange.  So the late comers will not be able to claim those already-referred customers unless they change their account name. 

Small exchange owners want their users to use big exchange products and services because they get the network fees from users they signed up.

So having bigger exchanges come in is mostly upside.  New exchanges still have their unique source of new users and now have the depth of the bigger exchange to offer them.

Meanwhile, the bigger exchange has access to the new customers from the smaller exchanges who want access to the big exchanges more mature products and services.

And anyone can compete to provide the best Exchange Backed Asset (EBA) as a reserve currency for trading against the union of everybody's assets.  (Being big is one reason to trust an EBA, but bigness alone isn't decisive.)  Putting up a better form of multi-sig controlled collateral and transparent 100% hackproof backing could be done by any sized exchange.

And since all EBAs are sold into existence, any size exchange can innovate in what to do with the assets they receive "on deposit" for their EBAs.  So the best technology wins, not the deepest pockets.

Before long, some EBA will emerge as the perfect "checking" (not saving) currency that you hold and use for a short time exposure to a counterparty because of its perfect peg and blazing speed.   (Savings are held in counterparty free MPAs).

Best of both worlds and you can move between them in 3 seconds.

Since nanocards can tap any bitshares account, you can spend any of these at any merchant immediately.

After that, exactly what do you need other cryptos for at all?   

The BitShares Exchange Network, for the first time, lets Exchange Backed Assets serve as real merchant currencies not just poker chips limited to use on a stove pipe exchange.

[abit]

An issue of shared order book strategy just came to my head. In short, if we try to get small exchanges adopt BitShares first, we will probably harder to get the big ones.

Say if we have already 3 small exchanges happily operating on top of BitShares. One day, come in another big exchange, which is bigger than the combination of the 3 small ones, guess what will happen? I guess, either the small ones be unhappy that some customers may go to trade with the big one, or the big one will be unhappy that it have to accept tokens issued by the small ones and/or have to ask the small ones for approval when need to issue shared tokens / withdraw from shared collateral. Will this cooperation schema succeed?

Anyway, at least the small ones should be able to survive at very first. When we're getting bigger and bigger, I don't know if the small ones can still survive.

Thoughts?

[Samupaha]

The main challenge I see here is "users" or say "customers". They said "I don't want to send users elsewhere". However, unless an exchange let their customer register on BitShares platform, it's difficult to use BitShares's Market Engine. Even CCEDK has both a self maintained engine + self maintained user database, and BitShares Engine + BitShares user registration entry, which are independent to each other so far.

So another challenge is resource. In this way the exchanges have to split efforts between 2 platforms. It's hard if they haven't enough resources.

Yeah, these are good points.

So we should focus on exchanges:
- That are just starting. They don't have their own market engine yet. They can start with Bitshares blockchain and speed up their launching.
- That have crappy market engine. It needs complete rewriting. They don't need to do that, they can just change to Bitshares blockchain.

The target is of course to have the exchange use only our blockchain and not their own market engine. Most potential exchanges are those who are in a need of a market engine.

If the exchange has already a good market engine and devs that can handle all necessary development, we don't have much to offer at this point. Maybe best scenario would be that they are interested in becoming a gateway.

[abit]

Akado, I think you are a little bit too fixated to the shared orderbook and common asset thing. I agree that it would be great to see that but given that it's very difficult to achieve I don't think that we should focus on that right now.

First, let's try to get at least one exchange to use Bitshares blockchain as their trading engine (besides OL).

This is how I would market it:

You can use Bitshares blockchain as a trading engine: You can either use it just for your own tokens or let users trade all assets that are available. No need for development and maintenance of your own trading engine.

You need to do only the GUI, hot and cold wallets and a gateway to handle the deposits and withdraws.

Users will use IOU-tokens in the blockchain, issued by your gateway.

Whitelisting is optional. This means that you can restrict how your IOUs are traded. For example, you could have BTC-IOU that can be traded freely in the blockchain, and you could have USD-IOU that can be traded only by those accounts that are identified, and only with IOUs that are issued by you.

You will get a share of the transaction fees when users make transactions with the assets that you have issued.

You can make extra money by referring users to the Bitshares blockchain. You will get referral income automatically, handled by the blockchain, everytime when users make transactions. For exchanges this might bring significant amount of extra revenue.

Steps:
1. Create GUI for your exchange and a gateway with hot and cold wallets.
2. Issue UIA for all assets that you are going to use.
3. Start marketing and advertising.

Technically it's possible, but not easy. Think about these questions: what they need to invest by doing so? What they will get in return? At what risk?

The main challenge I see here is "users" or say "customers". They said "I don't want to send users elsewhere". However, unless an exchange let their customer register on BitShares platform, it's difficult to use BitShares's Market Engine. Even CCEDK has both a self maintained engine + self maintained user database, and BitShares Engine + BitShares user registration entry, which are independent to each other so far.

So another challenge is resource. In this way the exchanges have to split efforts between 2 platforms. It's hard if they haven't enough resources.

See my lists above, we need strong reasons to convince the exchanges to join us.

[Samupaha]

Akado, I think you are a little bit too fixated to the shared orderbook and common asset thing. I agree that it would be great to see that but given that it's very difficult to achieve I don't think that we should focus on that right now.

First, let's try to get at least one exchange to use Bitshares blockchain as their trading engine (besides OL).

This is how I would market it:

You can use Bitshares blockchain as a trading engine: You can either use it just for your own tokens or let users trade all assets that are available. No need for development and maintenance of your own trading engine.

You need to do only the GUI, hot and cold wallets and a gateway to handle the deposits and withdraws.

Users will use IOU-tokens in the blockchain, issued by your gateway.

Whitelisting is optional. This means that you can restrict how your IOUs are traded. For example, you could have BTC-IOU that can be traded freely in the blockchain, and you could have USD-IOU that can be traded only by those accounts that are identified, and only with IOUs that are issued by you.

You will get a share of the transaction fees when users make transactions with the assets that you have issued.

You can make extra money by referring users to the Bitshares blockchain. You will get referral income automatically, handled by the blockchain, everytime when users make transactions. For exchanges this might bring significant amount of extra revenue.

Steps:
1. Create GUI for your exchange and a gateway with hot and cold wallets.
2. Issue UIA for all assets that you are going to use.
3. Start marketing and advertising.

[Akado]

BitShares is about freedom .. no wait to force anyone to do anything ..

It is also a risky thing to have their assets locked away as collateral

Could we have a rule that an exchange must keep say %10 or %20 of their volume in collateral for BTAs? Just like banks have to maintain a reserve.

No one is forcing them to do anything, I believe that was just a suggestion, even if we agreed with that, it would ultimately be up to the exchanges to decide..

Still, I think it's way easier for them to have their btc for example, in a multi sig account managed by the exchanges participating. This would mean it's in everyone's interest not to mess things up and they could be easily monitored among themselves and by users too. And it's simple.

Thing is while we don't sort these kind of details first, it will be harder to get liquidity. Instead even if we manage them to join we'll most likely have a bunch of illiquid markets, plus we still have the risk factor of them going rogue.

If all exchanges put their (real) BTC in a multi-sig account, they're less likely to go rogue. They will monitor each other. And also the IOU issuer's account would be a multi-sig one which is anti-rogue.

However, although it's not hard to multi-sig a BTC account, imo it's much harder to multi-sig fiat accounts. In addition, is it possible to multi-sig accounts of LTC, DOGE and so? In the end maybe we can have a shared BTS/BTC market, but no other pairs.

Seems we're discussing a global (IOU of)BTC central bank schema.

Yes I'm discussing a global IOU/asset with the objective of making shared order books possible as I see they could bring great benefits.
Well I'd say fiat is different because one would only trade to fiat when he wants to cash out using the services as bridges.

As for the other currencies I assumed there are multi signature accounts for them too.. But you might be right, that doesn't mean they exist or every coin we decide to bring in has... Maybe the biggest ones have? Aren't there wallets which support multi currencies and multi signatures? Maybe that could do the trick.

Even if they don't have it, at least we could have shared order books on the main coins. btc, ltc, dash maybe?

[abit]

BitShares is about freedom .. no wait to force anyone to do anything ..

It is also a risky thing to have their assets locked away as collateral

Could we have a rule that an exchange must keep say %10 or %20 of their volume in collateral for BTAs? Just like banks have to maintain a reserve.

No one is forcing them to do anything, I believe that was just a suggestion, even if we agreed with that, it would ultimately be up to the exchanges to decide..

Still, I think it's way easier for them to have their btc for example, in a multi sig account managed by the exchanges participating. This would mean it's in everyone's interest not to mess things up and they could be easily monitored among themselves and by users too. And it's simple.

Thing is while we don't sort these kind of details first, it will be harder to get liquidity. Instead even if we manage them to join we'll most likely have a bunch of illiquid markets, plus we still have the risk factor of them going rogue.

If all exchanges put their (real) BTC in a multi-sig account, they're less likely to go rogue. They will monitor each other. And also the IOU issuer's account would be a multi-sig one which is anti-rogue.

However, although it's not hard to multi-sig a BTC account, imo it's much harder to multi-sig fiat accounts. In addition, is it possible to multi-sig accounts of LTC, DOGE and so? In the end maybe we can have a shared BTS/BTC market, but no other pairs.

Seems we're discussing a global (IOU of)BTC central bank schema.

[Akado]

BitShares is about freedom .. no wait to force anyone to do anything ..

It is also a risky thing to have their assets locked away as collateral

Could we have a rule that an exchange must keep say %10 or %20 of their volume in collateral for BTAs? Just like banks have to maintain a reserve.

No one is forcing them to do anything, I believe that was just a suggestion, even if we agreed with that, it would ultimately be up to the exchanges to decide..

Still, I think it's way easier for them to have their btc for example, in a multi sig account managed by the exchanges participating. This would mean it's in everyone's interest not to mess things up and they could be easily monitored among themselves and by users too. And it's simple.

Thing is while we don't sort these kind of details first, it will be harder to get liquidity. Instead even if we manage them to join we'll most likely have a bunch of illiquid markets, plus we still have the risk factor of them going rogue.

[xeroc]

BitShares is about freedom .. no wait to force anyone to do anything ..

It is also a risky thing to have their assets locked away as collateral

Could we have a rule that an exchange must keep say %10 or %20 of their volume in collateral for BTAs? Just like banks have to maintain a reserve.

[Pheonike]

Could we have a rule that an exchange must keep say %10 or %20 of their volume in collateral for BTAs? Just like banks have to maintain a reserve.

[Akado]

We would either need them to use BitAssets or a common UIA like OPENBTC for example. Other than that it doesn't really change anything.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

In the current model the customer has to trust the centralized exchange but the exchange doesn't have to trust anybody.
They only credit a customer with an IOU once they've confirmed the actual alt-coins have been received in their wallet.

While I'm sure I've misunderstood something, does your paragraph above mean an exchange would have to redeem IOUs from other member exchanges?

If so that would create a situation where a Cryptsy default would fall on other member exchanges or worse a rogue member exchange could issue IOUs out of thin air and redeem them on other member exchanges?

No, each exchange has its own UIA and they compete on how credibly they back it.  Whichever exchange demonstrates the Exchange Backed Asset (EBA) with the most transparency stands to become a popular Reserve Currency.

Then users can trade against EBAs from other exchanges (perhaps at a slight discount or premium) if they want to exit/enter through that exchange to use any of its unique features.  Since BitShares lets you switch holdings in 3 seconds, you can spread out your risk using several of the EBAs or put your long term holdings into a counterparty free bitAsset if available.

The point is that something the exchange must do anyway (issue EBA IOUs for trading) can now become a new asset from which they can generate new revenue.  Especially if they innovate in how to prove credible, transparent backing.

Exchanges might even become a steady market for bitAssets if they chose a basket of them as a way to back their EBAs.

Then we won't have shared order books. We can have both but with the issue empirical mentioned, which I addressed on my post above.

[Stan]

We would either need them to use BitAssets or a common UIA like OPENBTC for example. Other than that it doesn't really change anything.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

In the current model the customer has to trust the centralized exchange but the exchange doesn't have to trust anybody.
They only credit a customer with an IOU once they've confirmed the actual alt-coins have been received in their wallet.

While I'm sure I've misunderstood something, does your paragraph above mean an exchange would have to redeem IOUs from other member exchanges?

If so that would create a situation where a Cryptsy default would fall on other member exchanges or worse a rogue member exchange could issue IOUs out of thin air and redeem them on other member exchanges?

No, each exchange has its own UIA and they compete on how credibly they back it.  Whichever exchange demonstrates the Exchange Backed Asset (EBA) with the most transparency stands to become a popular Reserve Currency.

Then users can trade against EBAs from other exchanges (perhaps at a slight discount or premium) if they want to exit/enter through that exchange to use any of its unique features.  Since BitShares lets you switch holdings in 3 seconds, you can spread out your risk using several of the EBAs or put your long term holdings into a counterparty free bitAsset if available.

The point is that something the exchange must do anyway (issue EBA IOUs for trading) can now become a new asset from which they can generate new revenue.  Especially if they innovate in how to prove credible, transparent backing.

Exchanges might even become a steady market for bitAssets if they chose a basket of them as a way to back their EBAs.

[Akado]

We would either need them to use BitAssets or a common UIA like OPENBTC for example. Other than that it doesn't really change anything.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

In the current model the customer has to trust the centralized exchange but the exchange doesn't have to trust anybody.
They only credit a customer with an IOU once they've confirmed the actual alt-coins have been received in their wallet.

While I'm sure I've misunderstood something, does your paragraph above mean an exchange would have to redeem IOUs from other member exchanges?

If so that would create a situation where a Cryptsy default would fall on other member exchanges or worse a rogue member exchange could issue IOUs out of thin air and redeem them on other member exchanges?

They shouldn't be able to issue assets out of thin air, because if they have a shared order book with the same asset, all services using that asset would need to have a weight on it to prevent that. I think that would be good in the sense that they would monitor each other too to avoid abuse, plus the would need everyone's permission.

As for the first point... you make a good case. Unlike you I only saw it from a user's pov, which means that for me if an exchange went rogue,I could still redeem my IOUs with another exchange meaning I would never loose my BTC, ever.

However, like you pointed, from an exchange's pov, it's a completely different view that I haven't thought about! I didn't give it too much thought but my first reaction upon reading that is it could be exploitable....

If we have 5 exchanges. All with 100 btc on their addresses and the equivalent on our chain, meaning 500 OPENBTC for example.
If one exchange goes rogue, there will be 100 extra BTC on the market that cannot be redeemed. I mean, they can but then we will see stuff like Gox and Cryptsy all over again which is what we're trying to avoid. I think we really should thought this through first since it's has the potential to jeopardize the entire DEX...

The only solution atm is having exchanges locking BTC in collateral... So when a client deposits BTC on their account, the exchange should use that btc to by the respective amount of BTS at lock it, maybe in a multi signature or account with permissions... Then we get to the same problem as bitAssets, what if the price of BTS goes way up or way down? That can mess up the collateral, that's why we need 200% to create bitAssets.... and now we're back to the same initial step, where exchanges might not be able to keep up with the collateral.

Even if they would place only 100% collateral, I doubt they would do all of that, it's too complex. Plus, how would they buy bts? They would need to use an external exchange for that LOL.

They could share a multisignature BTC, LTC, DOGE, etc accounts with other exchanges to prevent that... But again, I just don't see exchanges willing to do that. The only ones who might be willing to do this is either an exchange that sees the potential in this or is just a  very small one.  Then we would work our way to the top till we have many small exchanges...

There might be another way, but atm the only way I see it is having them sharing all wallets with multi-signature. However only small exchanges would accept that. No one will want other exchanges to give them permission to use their funds... but then again, it's not THEIR funds, it's not the exchange's funds. It's USER'S funds, so they should do this in good faith..

This is the only option I see atm. Otherwise we can't prevent an exchange from going away with user's funds. We need to turn the game around. Make the exchanges WANT to join us and not the other way around. Because we are the best option. That will make them "give us" something in exchange, which they really aren't because funds are not theirs, are from their users. Imo this argument makes sense, but exchanges can be just stubborn and refuse it. We just have to go with people who trust us, see potential in this project and are willing to provide the best services for their users.

This scheme would make it even easier to audit! For example if there are 1569 OPENBTC issued on the DEX then with a simple click they can check the multi account address and  check there are 1569 BTCs there. For the sake of transparency.



Edit: We also need that bug that rounds up the order values not letting you match other orders. This is essential. No exchange can operate or join us if we dont fix that.

[Empirical1.2]

We would either need them to use BitAssets or a common UIA like OPENBTC for example. Other than that it doesn't really change anything.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

In the current model the customer has to trust the centralized exchange but the exchange doesn't have to trust anybody.
They only credit a customer with an IOU once they've confirmed the actual alt-coins have been received in their wallet.

While I'm sure I've misunderstood something, does your paragraph above mean an exchange would have to redeem IOUs from other member exchanges?

If so that would create a situation where a Cryptsy default would fall on other member exchanges or worse a rogue member exchange could issue IOUs out of thin air and redeem them on other member exchanges?

[Stan]

My explanation of "why" was dismissed as "Don't use big marketing paragraph when you speak to developer".

That's what I wrote above "you drawn a huge pie", yes, it looks like a drawn pie, not a real one. 

Here's another way of explaining it in terms of our growing understanding of this particular exchange's Way of Thinking. I'd like to get your opinions on it before I forward it to him...

Since you are first and foremost a technical developer, why not work with us to design the world's first exchange network?
Help us optimize the design until it's too good to resist using yourself.  Here's a sample of what we've got so far: 

My question (as if I'm an exchange) would be: if you can't help us, why would we help you? Or say, they are less motivated if we say we need their help to build something, we should (be able to) say we already have something and if they join they'll be benefited (Of course they need some efforts to be able to join).

From a technical perspective, a decentralized exchange has access to the orders of all member exchanges and the ability to execute atomic trades via a single neutral trading engine resident on a shared blockchain.  Here’s the mother lode of  “simple” technical data:  http://docs.bitshares.org/bitshares/user/dex.html

As you pointed out, an exchange can emulate this using a bot talking via APIs to the trading engines of many exchanges, but race conditions and conflicts are inevitable.  On a common decentralized blockchain platform like BitShares, trades are finalized in one atomic 3-second block, no matter which exchange initiated the offer.  No race conditions are possible.

When you all place your orders under the control of the same neutral exchange engine, you get instant atomic arbitrage across all asset pairs. 

Then it gets interesting.

As an exchange you routinely issue your users what amounts to IOU-USD or IOU-BTC or IOU-DOGE “virtual-assets” to trade with on your exchange.  You take their real USD and BTC and DOGE at the door (just like always) and let them trade with your exchanges "IOU" assets like poker chips until it’s time to check out.  They trust your reputation that you will always reliably redeem their poker chips when it is time to cash out.  So your IOU assets are backed by your reputation. 

These paragraphs make sense. But maybe not so attractive.

Why not make your reputation a globally tradable commodity?  As it grows, more people prefer to hold your asset as their reserve currency.  And you earn fees every time they use your global reserve currency.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

These make less sense for me. It's not an exchange's core business.

As a customer, my assets can take advantage of arbitrage opportunities between member exchanges in a twinkling of an eye.  People taking the slow bot route get left in the dust or find that their assets are sitting on the wrong exchange when they need to move quickly.  Not so on the common real-time trading platform powered by BitShares.

Something wrong here. Tell these to users but not exchanges.
Cross-exchange business (or arbitrage opportunities) is not which an exchange would focus on, it's more attractive to traders.
With a shared order book there will be less arbitrage opportunities.

Thinking as an innovative developer, you have a unique opportunity to help work out the details of the world’s first network of exchanges. 

Right now, there are just two exchanges involved so far - CCEDK’s OpenLedger and BitShares DEX.  Several other small exchanges have expressed intent to join but are not yet members.  You could be the second mature exchange partner working with OpenLedger and BitShares to optimize the network interoperability to make the benefits to member exchanges more compelling and obvious. 

When we have fully optimized the design to where CCEDK and C-DEX are both happy with the increased synergistic services we can each offer our own customers, then the three of us can go rolling up all the small exchanges as new partners.  This will increase our collective apparent size, making membership more attractive to even bigger exchanges.

Like a rolling stone.

So, since you think like a developer looking for a new edge, why not work with us and help invent the only exchange network the world will ever need?  By the time the Big Exchanges wake up, they'll be asking to join us.

Yes "an innovative developer" may be attracted by these words, but a "conservative" developer would refuse them. I don't know whether you know you're talking to whom.


Here I listed some brief Q&A's, wish we can improve them together:

Questions from an exchange and answers to them:
1. I want more volume / users / profit / influence
--> shared order book

2. I don't want to send users elsewhere
--> self designed/hosted GUI (Website and/or mobile app)

3. I want more security
--> user data and trading data on blockchain, so don't need to worry about database-hack
--> (unavoidable) if host a GUI, need to make sure it's secure.

4. I want less risk
--> you don't need to issue IOUs which need to be guaranteed by yourself *ALONE*, other member exchanges will share your risk
--> (unavoidable) with BitShares you still have to manage the equities deposited by your customer

5. I want lower cost
--> less maintenance cost on market engine, databases if use BitShares blockchain and market engine

6. How to migrate to BitShares (required efforts/changes on my system)

7. The cost of migration?

8. Risks of migration?

9. Difference / Pros and cons between self-issued assets and shared assets?

Excellent input.  Thanks! 

[abit]

My explanation of "why" was dismissed as "Don't use big marketing paragraph when you speak to developer".

That's what I wrote above "you drawn a huge pie", yes, it looks like a drawn pie, not a real one. 

Here's another way of explaining it in terms of our growing understanding of this particular exchange's Way of Thinking. I'd like to get your opinions on it before I forward it to him...

Since you are first and foremost a technical developer, why not work with us to design the world's first exchange network?
Help us optimize the design until it's too good to resist using yourself.  Here's a sample of what we've got so far: 

My question (as if I'm an exchange) would be: if you can't help us, why would we help you? Or say, they are less motivated if we say we need their help to build something, we should (be able to) say we already have something and if they join they'll be benefited (Of course they need some efforts to be able to join).

From a technical perspective, a decentralized exchange has access to the orders of all member exchanges and the ability to execute atomic trades via a single neutral trading engine resident on a shared blockchain.  Here’s the mother lode of  “simple” technical data:  http://docs.bitshares.org/bitshares/user/dex.html

As you pointed out, an exchange can emulate this using a bot talking via APIs to the trading engines of many exchanges, but race conditions and conflicts are inevitable.  On a common decentralized blockchain platform like BitShares, trades are finalized in one atomic 3-second block, no matter which exchange initiated the offer.  No race conditions are possible.

When you all place your orders under the control of the same neutral exchange engine, you get instant atomic arbitrage across all asset pairs. 

Then it gets interesting.

As an exchange you routinely issue your users what amounts to IOU-USD or IOU-BTC or IOU-DOGE “virtual-assets” to trade with on your exchange.  You take their real USD and BTC and DOGE at the door (just like always) and let them trade with your exchanges "IOU" assets like poker chips until it’s time to check out.  They trust your reputation that you will always reliably redeem their poker chips when it is time to cash out.  So your IOU assets are backed by your reputation. 

These paragraphs make sense. But maybe not so attractive.

Why not make your reputation a globally tradable commodity?  As it grows, more people prefer to hold your asset as their reserve currency.  And you earn fees every time they use your global reserve currency.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

These make less sense for me. It's not an exchange's core business.

As a customer, my assets can take advantage of arbitrage opportunities between member exchanges in a twinkling of an eye.  People taking the slow bot route get left in the dust or find that their assets are sitting on the wrong exchange when they need to move quickly.  Not so on the common real-time trading platform powered by BitShares.

Something wrong here. Tell these to users but not exchanges.
Cross-exchange business (or arbitrage opportunities) is not which an exchange would focus on, it's more attractive to traders.
With a shared order book there will be less arbitrage opportunities.

Thinking as an innovative developer, you have a unique opportunity to help work out the details of the world’s first network of exchanges. 

Right now, there are just two exchanges involved so far - CCEDK’s OpenLedger and BitShares DEX.  Several other small exchanges have expressed intent to join but are not yet members.  You could be the second mature exchange partner working with OpenLedger and BitShares to optimize the network interoperability to make the benefits to member exchanges more compelling and obvious. 

When we have fully optimized the design to where CCEDK and C-DEX are both happy with the increased synergistic services we can each offer our own customers, then the three of us can go rolling up all the small exchanges as new partners.  This will increase our collective apparent size, making membership more attractive to even bigger exchanges.

Like a rolling stone.

So, since you think like a developer looking for a new edge, why not work with us and help invent the only exchange network the world will ever need?  By the time the Big Exchanges wake up, they'll be asking to join us.

Yes "an innovative developer" may be attracted by these words, but a "conservative" developer would refuse them. I don't know whether you know you're talking to whom.


Here I listed some brief Q&A's, wish we can improve them together:

Questions from an exchange and answers to them:
1. I want more volume / users / profit / influence
--> shared order book

2. I don't want to send users elsewhere
--> self designed/hosted GUI (Website and/or mobile app)

3. I want more security
--> user data and trading data on blockchain, so don't need to worry about database-hack
--> (unavoidable) if host a GUI, need to make sure it's secure.

4. I want less risk
--> you don't need to issue IOUs which need to be guaranteed by yourself *ALONE*, other member exchanges will share your risk
--> (unavoidable) with BitShares you still have to manage the equities deposited by your customer

5. I want lower cost
--> less maintenance cost on market engine, databases if use BitShares blockchain and market engine

6. How to migrate to BitShares (required efforts/changes on my system)

7. The cost of migration?

8. Risks of migration?

9. Difference / Pros and cons between self-issued assets and shared assets?

[Stan]

Here's another way of explaining it in terms of our growing understanding of this particular exchange's Way of Thinking. I'd like to get your opinions on it before I forward it to him...

Since you are first and foremost a technical developer, why not work with us to design the world's first exchange network?
Help us optimize the design until it's too good to resist using yourself.  Here's a sample of what we've got so far: 

From a technical perspective, a decentralized exchange has access to the orders of all member exchanges and the ability to execute atomic trades via a single neutral trading engine resident on a shared blockchain.  Here’s the mother lode of  “simple” technical data:  http://docs.bitshares.org/bitshares/user/dex.html

As you pointed out, an exchange can emulate this using a bot talking via APIs to the trading engines of many exchanges, but race conditions and conflicts are inevitable.  On a common decentralized blockchain platform like BitShares, trades are finalized in one atomic 3-second block, no matter which exchange initiated the offer.  No race conditions are possible.

When you all place your orders under the control of the same neutral exchange engine, you get instant atomic arbitrage across all asset pairs. 

Then it gets interesting.

As an exchange you routinely issue your users what amounts to IOU-USD or IOU-BTC or IOU-DOGE “virtual-assets” to trade with on your exchange.  You take their real USD and BTC and DOGE at the door (just like always) and let them trade with your exchanges "IOU" assets like poker chips until it’s time to check out.  They trust your reputation that you will always reliably redeem their poker chips when it is time to cash out.  So your IOU assets are backed by your reputation. 

Why not make your reputation a globally tradable commodity?  As it grows, more people prefer to hold your asset as their reserve currency.  And you earn fees every time they use your global reserve currency.

Now what if your reserve currency tokens were good in many other exchanges and you got transaction fees from everyone using your currency?  Transfers between member exchanges is a simple matter of exchanging IOU tokens, bypassing all the slow non-real-time blockchains out there.  And giving your customers another reason to do all their business with you.

As a customer, my assets can take advantage of arbitrage opportunities between member exchanges in a twinkling of an eye.  People taking the slow bot route get left in the dust or find that their assets are sitting on the wrong exchange when they need to move quickly.  Not so on the common real-time trading platform powered by BitShares.

Thinking as an innovative developer, you have a unique opportunity to help work out the details of the world’s first network of exchanges. 

Right now, there are just two exchanges involved so far - CCEDK’s OpenLedger and BitShares DEX.  Several other small exchanges have expressed intent to join but are not yet members.  You could be the second mature exchange partner working with OpenLedger and BitShares to optimize the network interoperability to make the benefits to member exchanges more compelling and obvious. 

When we have fully optimized the design to where CCEDK and C-DEX are both happy with the increased synergistic services we can each offer our own customers, then the three of us can go rolling up all the small exchanges as new partners.  This will increase our collective apparent size, making membership more attractive to even bigger exchanges.

Like a rolling stone.

So, since you think like a developer looking for a new edge, why not work with us and help invent the only exchange network the world will ever need?  By the time the Big Exchanges wake up, they'll be asking to join us.

[Stan]

thanks @Stan and I understand you're busy. Would you consider chatting with C-CEX on Skype? He even came back to me telling that no one has contacted him yet (I told him I would try to get someone who could explain things better). I can pm you or anyone else who would give this a go, his skype account.

I had a nice chat with him today. 
I have now been assigned more homework.

That said, I love how some of you guys have become proactive, rather than waiting on CNX as the huge bottleneck.  BitShares was always intended to be something decentralized that everybody works on.  It would appear that we had to take a big step back to make room for others to step up.  I'm looking for more ways to encourage that.

Nice! Did you manage to explain things better where I failed?
btw don't know if you saw it but a brazillian exchange claiming 100k users might approach you too, I provided your email

Nope.  You did just as good as I did. 

My explanation of "why" was dismissed as "Don't use big marketing paragraph when you speak to developer".

So, like you, I had to ask for a reprieve to go write a simple+technical summary of how it works.

It was graciously granted.

[Akado]

thanks @Stan and I understand you're busy. Would you consider chatting with C-CEX on Skype? He even came back to me telling that no one has contacted him yet (I told him I would try to get someone who could explain things better). I can pm you or anyone else who would give this a go, his skype account.

I had a nice chat with him today. 
I have now been assigned more homework.

That said, I love how some of you guys have become proactive, rather than waiting on CNX as the huge bottleneck.  BitShares was always intended to be something decentralized that everybody works on.  It would appear that we had to take a big step back to make room for others to step up.  I'm looking for more ways to encourage that.

Nice! Did you manage to explain things better where I failed?
btw don't know if you saw it but a brazillian exchange claiming 100k users might approach you too, I provided your email

[Stan]

thanks @Stan and I understand you're busy. Would you consider chatting with C-CEX on Skype? He even came back to me telling that no one has contacted him yet (I told him I would try to get someone who could explain things better). I can pm you or anyone else who would give this a go, his skype account.

I had a nice chat with him today. 
I have now been assigned more homework.

That said, I love how some of you guys have become proactive, rather than waiting on CNX as the huge bottleneck.  BitShares was always intended to be something decentralized that everybody works on.  It would appear that we had to take a big step back to make room for others to step up.  I'm looking for more ways to encourage that.

[Bhuz]

@Akado  I just want to second others opinion that you did a very good job.  Thanks for taking the initiative.

Absolutely! 

[Akado]

@Akado Imo it's better if you can talk to ccedk and metaexchange and blocktrades directly if you have chance , with some prepared information and questions (perhaps Stan has already tried but it doesn't matter). Perhaps they haven't much time to spend on the forum, so missed the discussion or unable to get the essentials of the discussion.

Thank you.

I think that's a good idea. I'm not convinced they would turn to OPENASSETS, they have their reasons. However it will be an opportunity to know those same reasons so in the future when we contact other exchanges and services and they use those arguments, we already have solid counter arguments against them 

@Akado  I just want to second others opinion that you did a very good job.  Thanks for taking the initiative.

@puppies thank you, I really appreciate it!

[puppies]

@Akado  I just want to second others opinion that you did a very good job.  Thanks for taking the initiative.

[abit]

@Akado Imo it's better if you can talk to ccedk and metaexchange and blocktrades directly if you have chance , with some prepared information and questions (perhaps Stan has already tried but it doesn't matter). Perhaps they haven't much time to spend on the forum, so missed the discussion or unable to get the essentials of the discussion.

Thank you.

[Akado]

I think OPENASSETS have a chance. Obviously every exchange decides what it's best for their business model. But from a user pov shared orderbooks could be very interesting. If we at some point get bigger I'm sure we could get smaller exchanges to use them.

So why not blocktrades and metaexchange join OPENASSETS? They are competing for the first bite. I think it's best if we start with this, try to let them combined as soon as possible.

Well they could use OPENASSETS but I guess that's up to them and their business model. I really think since they're bridges they should adopt it as it gives people a more easier opportunity to come in and out of the system, it makes liquidity easier imo.

Right now you need to go to metaex and get metabtc on the DEX then if you want to trade against more stuff you might need to trade to bts and then to openassets or something like that. If all used the same assets, it would be easier and be better for the order books. But they have their own reasons..

@Shentist could you fill us in? I'm sure you have your own strategy, but on the other side, dont you agree it would be easier to get in and out of the system like this?

In the end it's up to each business, I'm sure we'll have some who prefer to issue their UIA, other might prefer to use OPENASSET. Everyone will have their reasons, we just try to convince new ones joining to share the same asset if that's something we thing benefits us.

I think the secret is getting the smaller fish. We get some more volume first and then we get them. They're the ones who have the reasons to join us. Like Stan said. If we see this from a small exchange pov, they're joining a network and instantaneously get a bigger amount of volume and they can stay competitive with other bigger exchanges. So instead of having 10 small exchanges working separately with $2k volume each, you can have those same "small" exchanges have $20k volume instead.

@ccedk would you be willing to share permission with other exchanges if they used OPENASSETS? Assuming it's feasible of course. I guess they would  want that as some kind of insurance so they don't get played.

The idea with the bond markets would create a very interesting dynamic, the only problem is they can't be sure there are enough people providing enough collateral at all times, which they need otherwise they risk not being able to keep up with deposits. If one user decides to deposit 100 BTC image an exchange saying, "sorry we can't accept it, that's too much for us." That would be terrible 

[abit]

I think OPENASSETS have a chance. Obviously every exchange decides what it's best for their business model. But from a user pov shared orderbooks could be very interesting. If we at some point get bigger I'm sure we could get smaller exchanges to use them.

So why haven't blocktrades and metaexchange join OPENASSETS? They are competing for the first bite. I think it's best if we start with this, try to let them be combined as soon as possible.

Thank you very much Akado. It's very interesting and helpful to discuss with you.

[abit]

So a combination of bond market and multi-sig asset issuer is perfect. A group of big entities issue assets, in the meanwhile they can lend assets to smaller entities to earn some profits. Is there something missing?

[Akado]

For a shared order book, we need a same asset for all the exchanges. Obviously like OPENBTC which is issued by a single entity won't be accepted by other exchanges. But BitBTC which need 2x+ collateral won't be adopted as well if the exchanges need to put in the collateral. We need an asset with around 100% or less collateral so the exchanges can sustain.

One solution could be the bond market. Others will put in the collateral for you! You just need to pay for a market decided interest.

Another solution could be an asset owned by a multi-sig account, on which every exchanges have some weight of control, just like the Federal Reserve System. It's not collateral related anyway. With this, exchanges are able to issue the same asset on demand, and they'll find a balance among themselves.

I think OPENASSETS have a chance. Obviously every exchange decides what it's best for their business model. But from a user pov shared orderbooks could be very interesting. If we at some point get bigger I'm sure we could get smaller exchanges to use them.

Also we can use that multisig or account permissions with OPENASSETS right? If not, we should. That way every exchange using OpenLedger as a weight on it and every exchange would act as a watcher and control others, not letting them just print assets like crazy. Seems like a good idea.

I also like the bond markets idea but an exchange wouldn't have at any time guarantee of being able to provide the assets because it couldn't ever be sure other users would place the rest of the collateral it needs.

Also another way to see thing is, OPENASSETS only need to be or look like something exclusive. That makes people want to use them. It creates some kind of "necessity". We make them attractive enough and people will come.
Imagine doing rounds for exchange integration. You would only allow 3 or 5 to join at the time (with guaranteed support from the community). If we do that we're already making it exclusive, it will only take the first one to bite and others will follow. It's just a matter of making it attractive enough. Then we do more rounds and more would come in theory.

Of course any project can join. These rounds would only be used for exposure and guarantee those exchanges would get all the support they need during integration. Which, again, makes it sound exclusive  it's all about creating a necessity.

[abit]

For a shared order book, we need a same asset for all the exchanges. Obviously like OPENBTC which is issued by a single entity won't be accepted by other exchanges. But BitBTC which need 2x+ collateral won't be adopted as well if the exchanges need to put in the collateral. We need an asset with around 100% or less collateral so the exchanges can sustain.

One solution could be the bond market. Others will put in the collateral for you! You just need to pay for a market decided interest.

Another solution could be an asset owned by a multi-sig account, on which every exchanges have some weight of control, just like the Federal Reserve System. It's not collateral related anyway. With this, exchanges are able to issue the same asset on demand, and they'll find a balance among themselves.

//Edit:
One asset is not enough, we need a list of assets, so that they can be traded against each other. Side chain is not the answer, since it's impossible for fiat.

[Akado]

@Akado I hereby very appreciate your efforts. You've learned much and knew the strong point and weak point of our solution. You indicated how can we get stronger. What's your bts account? I'd like to donate a few.

@Stan thanks for drawn another huge pie for us.

Use that donation to support projects like OBITS and Metaexchange, tip anyone else who needs it or codes interesting stuff. Or to whoever has bots providing liquidity, we need those But thanks abit, that means a lot! The compliment itself is enough I really appreciate it!

[abit]

@Akado I hereby very appreciate your efforts. You've learned much and knew the strong point and weak point of our solution. You indicated how can we get stronger. What's your bts account? I'd like to donate a few.

@Stan thanks for drawn another huge pie for us.

[Akado]

btw Stan just sent Mercado Bitcoin your way too, a Brazilian exchange with more than 100000 users according to their website. They wanted the contact info of someone from BitShares so I provided your email. I think they should be in contact with you in a few days.

volume: 123,651 BTC in the last 24 hours (one hundred and  twenty three)

Dunno if you know any Brazilian but...
https://www.mercadobitcoin.com.br/

Will do now. edit: sent

[Stan]

thanks @Stan and I understand you're busy. Would you consider chatting with C-CEX on Skype? He even came back to me telling that no one has contacted him yet (I told him I would try to get someone who could explain things better). I can pm you or anyone else who would give this a go, his skype account.

Please send me his contact info.

[paliboy]

I would add coinmate.io to your list, they don't publish daily stats but it is about $5000.

[Akado]

I've tried to address those problems @Empirical1.2

If assets are collaterized, exchanges can't keep up with deposits unless they place collateral of their own, which I think they won't.

As for shared orderbooks, it can happen if either they use collaterized assets like the MPAs we have or use all the same asset (ie exchange joins OpenLedger and also adopts OPENBTC as their asset). I guess it's really up to them to choose what we have to offer, but collaterized assets are out of their reach imo. Otherwise they would always need twice the amount of deposits they have, which they might not be able to keep up with.

Now, if they received some kind of interest for their collateral that could be a different history. They could try go for it as it would be another revenue source.

So as a customer of an exchange that is using BEN you are still exposed to the same risk of that exchange being hacked, seized or running away with customer funds?

If so it seems like the main advantage would be accessing a shared orderbook, however the BEN orderbook is probably currently thinner that most exchanges you are approaching?

Kind of, you can still trade them, funds aren't locked up, ever. However, they would most likely loose value if something happens to the exchange. That's why we need shared order books, it's something very important. If an exchange looses funds it doesn't matter because it can still be traded, used and redeemed by any other service or user.

Without that, UIAs can be dangerous and don't really change anything other than you not having your funds locked, ever. But that doesn't guarantee they won't loose value because they're dependent on the service that issued them.

We would either need them to use BitAssets or a common UIA like OPENBTC for example. Other than that it doesn't really change anything.

Yes they all have bigger volume and orderbooks than us, though they're a few of the smallest exchanges. C-CEX was the biggest one I approached.


I think it's too early for them to join us as we still don't have that much to offer. The only ones that would benefit the most would be exchanges with volume inferior to $10k or $5k, which seems really small. But if we can get 5 exchanges with this small volume and all use the same asset, that's $20-50k daily volume + network effect. Then we could try and go for exchanges with $20-30k daily volume. Plus two of those and we already would have $100k. And so on. I think from that point onwards we wouldn't even need to chase any more exchanges as all the new and smallest ones would want to join us and we would "outcompete" others and see a steady increase of volume. It would really just be a matter of time till we get to $250 or $300 and so on.

I think that should be the plan. Start off with 5 to 10 of the smallest exchanges. Most likely to join us and it's a win win. Then the more we have with us, the easier it gets to get others. If we had all of the smallest exchanges under the wing of OpenLedger, network effect would be huge, we would be on multiple countries plus now competing directly with bigger exchanges which could really join or not but I guess it's just a matter of time till we surpass them, once again proving they're better joining us  It would basically be a snowball.

But for that they would all need to use the same assets.

I think if for 3 months or so we could find a group/taskforce, whatever to dedicate to this we could really do something! But we would need people with technical expertise and at the same time can sell a product.



Coinsetter - $450
bitebi9 - $600
Coinsquare $670
Bitorado $1100
NIX-E $1450
Bitcoins Norway $1700
CoinTrader $2200
meXBT $3000
LEObit $3000
BitKonan $5000
LEOxChange $6700
Cryptopia $7100
Bleutrade $7500
Negocie Coins $10000
LiteBit.eu $11000
CAVirtex $11600
YoBit $17500
C-CEX $22000

If we get the lowest ones up to $3k it would be +$13k. If we got them up to $10k it would be +$50k. The total volume of those exchanges is superior to $100k. Imagine that. It will only take the first ones. Then we can use them as examples for others to see how huge they could be. Imagine approaching a $10k exchange and say, well, if you join OpenLedger you get all this benefits plus a volume of $100k. You think they wouldn't join?

[Empirical1.2]

I've tried to address those problems @Empirical1.2

If assets are collaterized, exchanges can't keep up with deposits unless they place collateral of their own, which I think they won't.

As for shared orderbooks, it can happen if either they use collaterized assets like the MPAs we have or use all the same asset (ie exchange joins OpenLedger and also adopts OPENBTC as their asset). I guess it's really up to them to choose what we have to offer, but collaterized assets are out of their reach imo. Otherwise they would always need twice the amount of deposits they have, which they might not be able to keep up with.

Now, if they received some kind of interest for their collateral that could be a different history. They could try go for it as it would be another revenue source.

So as a customer of an exchange that is using BEN you are still exposed to the same risk of that exchange being hacked, seized or running away with customer funds?

If so it seems like the main advantage would be accessing a shared orderbook, however the BEN orderbook is probably currently thinner that most exchanges you are approaching?

[Akado]

I've tried to address those problems @Empirical1.2

If assets are collaterized, exchanges can't keep up with deposits unless they place collateral of their own, which I think they won't.

As for shared orderbooks, it can happen if either they use collaterized assets like the MPAs we have or use all the same asset (ie exchange joins OpenLedger and also adopts OPENBTC as their asset). I guess it's really up to them to choose what we have to offer, but collaterized assets are out of their reach imo. Otherwise they would always need twice the amount of deposits they have, which they might not be able to keep up with.

Now, if they received some kind of interest for their collateral that could be a different history. They could try go for it as it would be another revenue source.

[Empirical1.2]

Apologies if these questions are dumb and I should have a better understanding of BEN.

A traditional exchange seems to work as follows... 
 
I send BTC38 1000 LTC to their LTC deposit address.
BTC38 traditionally credits me with an LTC IOU that I can trade against others who have deposited LTC with BTC38.
BTC38 manages the security of  a hot wallet to enable withdrawals and a more secure cold wallet.
As a customer you have to hope that BTC38 will not get hacked/seized or run away with your money.

So if BTC38 converts to BEN...

1. Presumably I still send BTC38 1000 LTC to their LTC deposit address?

2. What do they credit me with?  (I would have thought it would have to be a generic BitLTC otherwise BTC38 LTC will not be fungible with CCDEK LTC and there can be no shared orderbook, but I know the spread on a traditional Smartcoin including a generic BitLTC would be too wide so it must be a privatized BitAsset?)

3. Presumably it is collateralized like a regular BitAsset?

4. So if the 1000 LTC I sent to BTC38 is hacked/seized or stolen I can still redeem my LTC IOU on BEN for 1000 LTC worth of BitShares?

 

[Akado]

thanks @Stan and I understand you're busy. Would you consider chatting with C-CEX on Skype? He even came back to me telling that no one has contacted him yet (I told him I would try to get someone who could explain things better). I can pm you or anyone else who would give this a go, his skype account.

[donkeypong]

When you get them on the phone or the online chat, all you have to say is, "Please hold for Stan Larimer." Or cut and paste.

[Stan]

Ok here's my first draft, hot off the presses.
(I didn't wait to polish it because I promised to get you something tonight.)

How about some help with spotting what I left out and how to make it all more clear?

Cut Years off Your Plan to Be the World's Biggest Exchange

Imagine if a number of Small Exchanges could network themselves together in a way that made each of them look like a bigger exchange to their customers.  That is, an exchange the apparent size of all member exchanges added together.

They would each keep their own customers and the fees they pay, but they would be able to offer those customers better spreads, more liquidity, deeper markets, stronger network effect, and a smorgasbord of products and services.  This makes them more attractive to their customers and earns them more profits because they all have more things to sell.

Customers don’t need to know that there are other exchanges involved, they think your exchange is simply bigger than it really is.  As long as you keep them happy and provide the best interface and customer service they will stay with you forever.  They won’t go wandering off in search of better spreads and liquidity – the bane of bootstrapping an exchange to compete in bigger leagues.

This is no different than how realtors team up to compete with their multi-list housing databases.
Each brings its own customers to a much bigger inventory!

Why do competing car dealers and restaurants all locate in the same mall, street or district?
Because together they attract more customers!

And now that, collectively, all members look like Medium Exchanges, guess what?  Other Medium Exchanges will want to join to the network to make themselves look like Big Exchanges – for all the same reasons.  Now all members have the advantages of being big and can compete on other factors like interface and customer service.  Eventually, every exchange in the world would need to join the network to compete.  And all the early adopter smaller exchanges will have just leap-frogged to the top of the heap.

Why wait years to grow the robust network effect you need to succeed?  Network with other exchanges and get there together – instantly!

That’s what you get on the BitShares Exchange Network (BEN).

Big BEN is a real time blockchain that implements a common back end set of order books with integral trading engines for every member exchange.  Each exchange provides its own uniquely competitive front end for that common order book.  No customer needs to know that a member is using a common “multilist” order book.    But, you’ll want to tell them because it’s a huge competitive edge!

This shared order book has the transparency and security of a multi-signature blockchain.  A real time blockchain capable of scaling as needed up to 100,000 transactions per second and down to 1 second transaction executions.  (Compare that to Bitcoin’s 7 TPS and 10 minute latency.)  And it’s operational today.  You can see CCEDK.com’s implementation of it at OpenLedger.info.  Its CEO, Ronny Boesing is a major pioneer who really gets it.  He’ll be happy to tell you why he joined the network and why he would love you to join him as an equal member.

Customer’s enter the Big BEN network via your web site but hold onto their own private keys, even while their assets are trading.  They can’t be Gox’ed because there is no central group of servers that can be hacked.   And the network gives you the lion’s share of their service and trading fees – plus whatever network fees they pay to access the products and services of all your partner/competitors.  Any where on the network.

What kind of products and services can they access?  Well look around at all your current competitors today.  What do they offer that you can’t?  Access to new markets?  Deals with major banks and credit cards?  Alternative regulatory rules where you currently can’t operate due to where you are based?  New financial products and derivitaves? Smart coins and smart contracts?

On the BitShares Exchange Network a worker can feed some Euro’s into an ATM in Munich Germany and a few seconds later his wife in the Philippines can pay for groceries in Pesos at her local market with a globally accepted debit card.    And neither the company that provided the ATM nor the company that provided the debit card had to negotiate or integrate with each other.  They got all that by being on the same network.

As an exchange, you can sell your customers any of the assets provided by any of the exchange members or offer your own to the customer’s of every other exchange.  Or you can sell them the counterparty free products and services that come built into the BitShares blockchain itself.  You can read all about them at BitShares.org.

Big BEN offers an exciting new world of explosive growth opportunities. Looking for a competive edge?  Looking to cut years off the time it takes to get traction in the bigger leagues you’ve been eyeing?  Take some time to let the possibilities sink in.  When you are ready, let’s talk!

Stan@Cryptonomex.com

[Stan]

My apologies.  I've been booked solid and it was all I could do to post a quick response.  I'll try to look at the OP in detail tonight.

[abit]

@abit and that was pretty much what I said, obviously not being enough

Yes I know. Obviously Stan didn't read the OP at all. My fault for haven't quoted more for him.

[Akado]

@abit and that was pretty much what I said, obviously not being enough

[abit]

thanks @xeroc and @BunkerChain Labs

You're right. I could have researched first. It was just that I sent a few emails just for the sake of it and really wasn't even expecting them to reply back. It was an innocent task. I tried to mention how they could benefit from us but I guess I didn't express myself better.

I think a better approach would be to start by asking what problems do they have when managing operations and how that could be prevented with BitShares. I wanted to but failed to show that concern you mention. I'm just not really used to doing this but I believe it was a good experience. I can always have someone else talking with him, someone with more knowledge.

Imo don't ask. Why will she answer? You should already know it before talk with her, at least you should know some possible problems she's facing. Or perhaps I'm wrong since I'm not a marketing/sales guy.

Any volunteers there?

@cass
Just letting you know I approve your worker.

Stuff missing are those easy steps. In case they're interested they need to know how difficult it is to migrate. What consequences that might have for them. How much time it takes and drawbacks. They need to know that so it doesn't affect their business.

One other detail is, atm we only focus on the users. How they benefit. But we should also focus on businesses because they're the ones who bring great amounts of users. They need to know why they benefit, what's in for them. What to they gain with this. Atm I can only come up with two things: database hosted on the blockchain so less expenses and more safety, saving them money and work. But there should be more. We won't be able to see them BitShares just with this. Referral program... yes, but they already make money with each trade their users do so there's not really a difference. We need to focus on businesses. This case, exchanges. There must be other advantages other than those, otherwise they won't come in.

So, could someone answer the following question in detail for me please: How do exchanges benefit from BitShares? How do they make more money or have more exposure? Let's not confuse with the benefits users have. Exchanges might not care about transparency, etc

@Stan please?

1.  Their users never give up control of their assets so there is no risk of the exchange being hacked and losing their customers money.
2.  They are completely transparent by placing all their assets on the blockchain so no one worries about their solvency or whether there may be hidden gotcha's that have popped up frequently in the industry already.
3.  They can share liquidity and order depth among the customers of all member exchanges while still keeping their own customers' fees.  This makes their Network Effect as big as the sum of all members.
4.  They can offer their customers access to the products and services of all member exchanges while retaining their cut of the transaction fees.

See also original Summer Announcement.

I'm a bit disappointment with this reply. Only abstract things.

[Akado]

-snip-

He could integrate a bitshares wallet to the website and on top of that earn up to 80% of the fees they generate via ref program

The question is, does that really change things and brings more benefits from an exchange pov? I mean, we need to assume they're on their comfort zone and to bring them out we can't just offer what they already have. We need to offer something better that makes it worth it all the hassle

[fav]

-snip-

He could integrate a bitshares wallet to the website and on top of that earn up to 80% of the fees they generate via ref program

[Akado]

Stan I think your answer is answers more the question "What would your exchange offer if they joined OpenLedger" and not "How can your exchange profit" from this.

Also, regarding the question of them having to use hot and cold wallets and still be vulnerable, what's your take on that?

How would you answer when he tells me "I don't want to send my users elsewhere". He still retains "ownership" of his clients, they're just operating directly on the blockchain now so..

My struggle is being able to explain this in the more simple way possible. I told him someone more knowledgeable would contact him. @Stan do you have the time to do it? Sorry to depend on you, it's just that I dont want to mess it up again. If he asks me another question that I'm not able to answer I dont want to tell him "ok let me get to someone who knows best and ill get back to you" that doesnt sound good or professional at all... That's my problem atm. Btw, overall, what do you think about our conversation?

[Stan]

thanks @xeroc and @BunkerChain Labs

You're right. I could have researched first. It was just that I sent a few emails just for the sake of it and really wasn't even expecting them to reply back. It was an innocent task. I tried to mention how they could benefit from us but I guess I didn't express myself better.

I think a better approach would be to start by asking what problems do they have when managing operations and how that could be prevented with BitShares. I wanted to but failed to show that concern you mention. I'm just not really used to doing this but I believe it was a good experience. I can always have someone else talking with him, someone with more knowledge.

Imo don't ask. Why will she answer? You should already know it before talk with her, at least you should know some possible problems she's facing. Or perhaps I'm wrong since I'm not a marketing/sales guy.

Any volunteers there?

@cass
Just letting you know I approve your worker.

Stuff missing are those easy steps. In case they're interested they need to know how difficult it is to migrate. What consequences that might have for them. How much time it takes and drawbacks. They need to know that so it doesn't affect their business.

One other detail is, atm we only focus on the users. How they benefit. But we should also focus on businesses because they're the ones who bring great amounts of users. They need to know why they benefit, what's in for them. What to they gain with this. Atm I can only come up with two things: database hosted on the blockchain so less expenses and more safety, saving them money and work. But there should be more. We won't be able to see them BitShares just with this. Referral program... yes, but they already make money with each trade their users do so there's not really a difference. We need to focus on businesses. This case, exchanges. There must be other advantages other than those, otherwise they won't come in.

So, could someone answer the following question in detail for me please: How do exchanges benefit from BitShares? How do they make more money or have more exposure? Let's not confuse with the benefits users have. Exchanges might not care about transparency, etc

@Stan please?

1.  Their users never give up control of their assets so there is no risk of the exchange being hacked and losing their customers money.
2.  They are completely transparent by placing all their assets on the blockchain so no one worries about their solvency or whether there may be hidden gotcha's that have popped up frequently in the industry already.
3.  They can share liquidity and order depth among the customers of all member exchanges while still keeping their own customers' fees.  This makes their Network Effect as big as the sum of all members.
4.  They can offer their customers access to the products and services of all member exchanges while retaining their cut of the transaction fees.

See also original Summer Announcement.

[Akado]

BitMEX could be an interesting one to approach, it seems they're very interested in leverage trading and are doing guides and blog posts about it. Bond Markets could be a good news for them

Reply from JUSTCOIN

Dear Akado,

Thanks for contacting ANX.

We look for competitive vendors from time to time. If you can provide more information about your company such as work portfolio, service scope, pricing tables as well as to offer us a free demo / trial etc., we can file the information for records. If we have any suitable projects which are related to your service scope, we can have further discussion.
Queena
Customer Support Team

[Akado]

Let me just say they're still waiting to be contacted. If someone knowledgeable enough would step forward would be nice.

[abit]

Imo don't ask. Why will she answer? You should already know it before talk with her, at least you should know some possible problems she's facing. Or perhaps I'm wrong since I'm not a marketing/sales guy.

Yes, we need to know the general problems first which are mostly security related. But we also need to know what problems each exchange has as each case is a different case right? And from then, explain how we can prevent and solve those same problems, specifically for them. I'm writing a post which is kind of big atm, however, I'm missing the part where exchanges benefit the most, that's the main part to get them on board.

Thanks for pinging Stan, he might be able to help. He pitched BitShares to businesses already, maybe not to exchanges directly? But still, some situations might be similar.

Imo @ccedk may know answers of most of your questions. Best if they can help. Have you joint the Telegram group? Many discussions have been made there. Ronny of CCEDK is active at most time.

//Update: I've seen your post above this https://bitsharestalk.org/index.php/topic,18642.msg270546.html#msg270546, have you tried?

[Akado]

Imo don't ask. Why will she answer? You should already know it before talk with her, at least you should know some possible problems she's facing. Or perhaps I'm wrong since I'm not a marketing/sales guy.

Yes, we need to know the general problems first which are mostly security related. But we also need to know what problems each exchange has as each case is a different case right? And from then, explain how we can prevent and solve those same problems, specifically for them. I'm writing a post which is kind of big atm, however, I'm missing the part where exchanges benefit the most, that's the main part to get them on board.

Thanks for pinging Stan, he might be able to help. He pitched BitShares to businesses already, maybe not to exchanges directly? But still, some situations might be similar.

[abit]

thanks @xeroc and @BunkerChain Labs

You're right. I could have researched first. It was just that I sent a few emails just for the sake of it and really wasn't even expecting them to reply back. It was an innocent task. I tried to mention how they could benefit from us but I guess I didn't express myself better.

I think a better approach would be to start by asking what problems do they have when managing operations and how that could be prevented with BitShares. I wanted to but failed to show that concern you mention. I'm just not really used to doing this but I believe it was a good experience. I can always have someone else talking with him, someone with more knowledge.

Imo don't ask. Why will she answer? You should already know it before talk with her, at least you should know some possible problems she's facing. Or perhaps I'm wrong since I'm not a marketing/sales guy.

Any volunteers there?

@cass
Just letting you know I approve your worker.

Stuff missing are those easy steps. In case they're interested they need to know how difficult it is to migrate. What consequences that might have for them. How much time it takes and drawbacks. They need to know that so it doesn't affect their business.

One other detail is, atm we only focus on the users. How they benefit. But we should also focus on businesses because they're the ones who bring great amounts of users. They need to know why they benefit, what's in for them. What to they gain with this. Atm I can only come up with two things: database hosted on the blockchain so less expenses and more safety, saving them money and work. But there should be more. We won't be able to see them BitShares just with this. Referral program... yes, but they already make money with each trade their users do so there's not really a difference. We need to focus on businesses. This case, exchanges. There must be other advantages other than those, otherwise they won't come in.

So, could someone answer the following question in detail for me please: How do exchanges benefit from BitShares? How do they make more money or have more exposure? Let's not confuse with the benefits users have. Exchanges might not care about transparency, etc

@Stan please?

[Akado]

thanks @xeroc and @BunkerChain Labs

You're right. I could have researched first. It was just that I sent a few emails just for the sake of it and really wasn't even expecting them to reply back. It was an innocent task. I tried to mention how they could benefit from us but I guess I didn't express myself better.

I think a better approach would be to start by asking what problems do they have when managing operations and how that could be prevented with BitShares. I wanted to but failed to show that concern you mention. I'm just not really used to doing this but I believe it was a good experience. I can always have someone else talking with him, someone with more knowledge.

Any volunteers there?

@cass
Just letting you know I approve your worker.

Stuff missing are those easy steps. In case they're interested they need to know how difficult it is to migrate. What consequences that might have for them. How much time it takes and drawbacks. They need to know that so it doesn't affect their business.

One other detail is, atm we only focus on the users. How they benefit. But we should also focus on businesses because they're the ones who bring great amounts of users. They need to know why they benefit, what's in for them. What to they gain with this. Atm I can only come up with two things: database hosted on the blockchain so less expenses and more safety, saving them money and work. But there should be more. We won't be able to see them BitShares just with this. Referral program... yes, but they already make money with each trade their users do so there's not really a difference. We need to focus on businesses. This case, exchanges. There must be other advantages other than those, otherwise they won't come in.

So, could someone answer the following question in detail for me please: How do exchanges benefit from BitShares? How do they make more money or have more exposure? Let's not confuse with the benefits users have. Exchanges might not care about transparency, etc

[Musewhale]

, great, good idea, i like it, just do it!

[cass]

all we need are 2-3 simple one pagers.

ok so i would able to help here, if my worker proposal would be approved.

How about cass's worker proposal, and why?

still thinking about this. my main concern is that we should concentrate on core functionality for now.

workers could hire cass on a "per job" basis and add x amount to their worker proposal to pay him

As freelancer --> contract and project based
The other way around .. (paid half upfront - and half after delivering):

Hourly rates without a worker are  $70/h

[fav]

all we need are 2-3 simple one pagers.

one aimed to exchanges, one aimed to users, one aimed to merchants.

and make them ref variable means the referral links in the sites change according to the ?ref

[BunkerChainLabs-DataSecurityNode]

Great effort @Akado!

I think we should consider this a small piece of some market research.. I think you would have gotten a lot further if you would have started from that point.. market research that is.

You went in there guns blazing without knowing what you were shooting for. This happens in sales all the time and why you in this instance and many fail to close. Without understanding your customers pains and what they are looking to gain, you can never hope to sell them what you are offering unless you happen to hit it by luck. Bitshares has got a bunch of feature sets, but without a clear understanding of the exchanges problems, what they like to see solved, and the things they will gain as an exchange, it will fall on def ears. So I am not surprised by his responses.

When you go into conversations like that you got to think about who you are talking to is thinking at ALL times.. WIIFM (Whats in it for me). So when he asked you what is bitshares, a more targeted answer might have been "its a platform that will help you secure your exchange and save you money".  Everything else doesn't matter.. no matter how awesome YOU think it is.. all that matters in that moment is how awesome HE thinks something about Bitshares is for his business that increases his profitability.

Getting him wrapped up in technical elements even more now is NOT the answer. He still doesn't know why he should even be thinking about that. You still got no idea what he needs either. You could have gotten a lot of these answers if you took more interest in his business instead of selling Bitshares.

People don't care how much you know until they know how much you care.

I don't know if he knows you care about his business yet... if you have some way to get that across by perhaps asking him about his business and being genuine in your concern to see it improve and grow, he would be more eager to listen to what you have to say. Otherwise you become what you mentioned fearing.. another coin trying to sell him on get on their exchange.

I don't know if any research has been done on the topic of crypto exchanges operations.. some people have mentioned in this thread some of the issues.. but to really know whats going on and what challenges they would like to solve and other things they like to gain in the crypto exchange business some market research should be done or found on the matter. Then you take that and see how Bitshares may or may not solve those things and put it all together into something that is easy to digest for exchanges. This would be a VERY targeted information piece for that particular market. They will love it.

Why hasn't that been done yet? Because nobody has really tried yet like you have. .. it's not up to devs to sell it or come up with multiple marketing materials for every market.. it's up to anybody who would like to like you did today. I am only pointing out what went wrong so that you can go at it again more prepared and with more odds of success. Considering we are still pending API development to improve our feature sets as an exchange platform similar to central exchanges, I think it is a bit premature to be talking migration with them.

Nonetheless.. I think its always good to develop relationships and learn more about the marketplace so that you can better serve them. I would recommend taking a step back and focusing on that first.. then regroup and approach them again this time with focus on what matters to them.

Again.. great initiative and effort. I hope you keep at it and create what might be the repo data for what exchanges need to get onboard and why they should.

[xeroc]

@akando: you did very well. Couldnt have done any better.

Looking at that dialog, we can be proud to have ccedk on board!

I made the business opportunities for the xchange business clear in the whitepaper, but agree that we should clarify it more in the docs ..

[wallace]

the token and trading information database is mainteined by bitshares network based blockchain. this is a cost saving for the decentralize exchanges.

but it seems they care more about the alt coins wallets mainteins, actually no one can help them about this.

[Akado]

[21:56:11] C-CEX.com: then what's the difference?
[21:56:18] C-CEX.com: Deposit on me, trade on me, withdraw on me...

OK, let me try to answer.

(better a table here)

deposit --- user send coins/fiat to exchange's address/bank account, exchange save info in database --- user send coins/fiat to bridge's address/bank account, bridge issue/send IOU to user on BitShares blockchain
withdraw --- user request withdraw, exchange send coins/fiat to user's address/bank account, save info in database --- user send IOU back to bridge on BitShares blockchain, bridge send coins/fiat to user's address/bank account

I think his point was since you still need to access your cold/hot wallet while using the bridge, that it's still vulnerable and from his pov that didn't make sense.

Still, if you ever want to move coins, you need to access your wallet. I think that logical is flawed because of it. One way or another, you have to do it. The database is simply held on the blockchain instead and I believe a service that cares about it's costumers would prefer this since it's the safest way to keep costumers safe. And I could have insisted on that a little bit more.

Hope someone is ready for round 2 and can share that with him.

[abit]

[21:56:11] C-CEX.com: then what's the difference?
[21:56:18] C-CEX.com: Deposit on me, trade on me, withdraw on me...

OK, let me try to answer.

(better a table here)
Operations --- how traditional exchanges work  --- how BitShares works
user registration --- save user info in database  --- save user info on BitShares blockchain
user login --- user communicates with exchange's server --- user communicates with any online wallet provider (official name?), or websocket service provider  (need a official name here) with a light wallet/mobile wallet
user identification -- user is mostly identified by password/2FA, rarely by public/private key pair (this needs to be confirmed), exchange's server is responsible for identification --- user is identified by public/private key pair, all full nodes of BitShares blockchain are responsible for identification when needed
deposit --- user send coins/fiat to exchange's address/bank account, exchange save info in database --- user send coins/fiat to bridge's address/bank account, bridge issue/send IOU to user on BitShares blockchain
withdraw --- user request withdraw, exchange send coins/fiat to user's address/bank account, save info in database --- user send IOU back to bridge on BitShares blockchain, bridge send coins/fiat to user's address/bank account
trade (submit/cancel order) --- user request, exchange save order info to database/memory --- user request, BitShares save order info on blockchain
trade (show order book) --- fetch data from database/memory --- fetch data from blockchain
trade (match order) --- matching is done by exchange's order matching engine, if able to match, save changes of user balance info / order info / trading history to database --- matching is done by BitShares market engine which is running on blockchain, if able to match, save changes of account balance / order info / order history to blockchain (every full node will check the result)

[Akado]

Good job @Akado !

[21:54:05] C-CEX.com: I don't want to send users elsewhere

Hard to answer this question indeed.
It seems that our first mover, CCEDK, still hasn't migrate their user database into OpenLedger yet. Without this, I don't know how to efficiently use the market engine of BitShares platform. Proxy the user's bid/ask requests to BitShares? Map BitShares's order book and/or trade history to their website? How to handle the fees involved? In the end, is OpenLedger actually independent from CCEDK?

//Edit:
Since they don't even know Bitshares, maybe the first step should be tell them BitShares is on top 10 of CoinMarketCap.com, and ask them to list bts on their own exchange.

Thanks! Well yeah but my first thought was that they could be playing silly just to know with what type of people they were dealing with and if they in fact didn't know, I didn't want to sound like those people always begging for a coin to be added. I just wanted them to know about the technology. Still, I realize it's too early now.

I always thought that our blockchain would be the backend of the exchange site.

[abit]

Good job @Akado !

[21:54:05] C-CEX.com: I don't want to send users elsewhere

Hard to answer this question indeed.
It seems that our first mover, CCEDK, still hasn't migrate their user database into OpenLedger yet. Without this, I don't know how to efficiently use the market engine of BitShares platform. Proxy the user's bid/ask requests to BitShares? Map BitShares's order book and/or trade history to their website? How to handle the fees involved? In the end, is OpenLedger actually independent from CCEDK?

//Edit:
Since they don't even know Bitshares, maybe the first step should be tell them BitShares is on top 10 of CoinMarketCap.com, and ask them to list bts on their own exchange.

[Akado]

Me too I couldn't explain it to someone running an exchange because I have never tried to fully understand what someone running an exchange is doing technically in depth.

The point with the wallet server is a good example. Next time one could try to explain step by step how they would operate their wallet servers differently.
Taken Open-Ledger and OPEN.BTC I would assume they own a BTC-adress which holds the exact number of OPEN.BTC, shoudn't they?

So while am at it: When I look at the open-ledger Site I don't see a link to this said BTC-Account in some BTC-Block explorer and the possibility to request a signed message as proof.
Shouldn't for the sake of transparency that is always mentioned be an easy way for me as a potential user of Openledger to verify that those BTC really are "there" and not just at the moment where my OPEN.BTC leave some gateway into my BTC-Wallet-address?

OK, Asset-Explorer Shows, that 70 OPEN.BTC are in existence. Will ask ronny for the address, maybe I'm missing something.
However this whole thing should be made clear and easy to understand. I'm a regular lurker since 2013 and consider myself not as dumb as my nick suggests 

You're right, it should, but since 2.0 is relatively young, that's because we're lacking this info. Maybe it's still too early to bring in exchanges. We're lacking proper documentation yet. Not enough support for those who might be interested and that can consequently take too much of CNX time (atm I doubt anyone else knows how to do it)

[mudshark79]

Me too I couldn't explain it to someone running an exchange because I have never tried to fully understand what someone running an exchange is doing technically in depth.

The point with the wallet server is a good example. Next time one could try to explain step by step how they would operate their wallet servers differently.
Taken Open-Ledger and OPEN.BTC I would assume they own a BTC-adress which holds the exact number of OPEN.BTC, shoudn't they?

So while am at it: When I look at the open-ledger Site I don't see a link to this said BTC-Account in some BTC-Block explorer and the possibility to request a signed message as proof.
Shouldn't for the sake of transparency that is always mentioned be an easy way for me as a potential user of Openledger to verify that those BTC really are "there" and not just at the moment where my OPEN.BTC leave some gateway into my BTC-Wallet-address?

OK, Asset-Explorer Shows, that 70 OPEN.BTC are in existence. Will ask ronny for the address, maybe I'm missing something.
However this whole thing should be made clear and easy to understand. I'm a regular lurker since 2013 and consider myself not as dumb as my nick suggests 

[Akado]

Me too I couldn't explain it to someone running an exchange because I have never tried to fully understand what someone running an exchange is doing technically in depth.

The point with the wallet server is a good example. Next time one could try to explain step by step how they would operate their wallet servers differently.
Taken Open-Ledger and OPEN.BTC I would assume they own a BTC-adress which holds the exact number of OPEN.BTC, shoudn't they?

So while am at it: When I look at the open-ledger Site I don't see a link to this said BTC-Account in some BTC-Block explorer and the possibility to request a signed message as proof.
Shouldn't for the sake of transparency that is always mentioned be an easy way for me as a potential user of Openledger to verify that those BTC really are "there" and not just at the moment where my OPEN.BTC leave some gateway into my BTC-Wallet-address?

I agree.

Only now I realize we might not have yet fully grasped how to migrate an exchange to BitShares. Either that or it just isn't well defined how.

I think this would be worth a worker proposal and should be included on documentation @xeroc a document explaining how this should be done so it's easier for any exchange to do it and what are the benefits of doing so, how do the exchanges profit from this. @ccedk or maybe this should be for OpenLedger, I dunno, whoever is up to the task.

But this should definitely be included in the documentation. It might be hard to do but it's a must if we want exchanges to join. In short:

1. Step by Step Tutorial
2. Why
3. Benefits
4. How do they profit

[mudshark79]

Me too I couldn't explain it to someone running an exchange because I have never tried to fully understand what someone running an exchange is doing technically in depth.

The point with the wallet server is a good example. Next time one could try to explain step by step how they would operate their wallet servers differently.
Taken Open-Ledger and OPEN.BTC I would assume they own a BTC-adress which holds the exact number of OPEN.BTC, shoudn't they?

So while am at it: When I look at the open-ledger Site I don't see a link to this said BTC-Account in some BTC-Block explorer and the possibility to request a signed message as proof.
Shouldn't for the sake of transparency that is always mentioned be an easy way for me as a potential user of Openledger to verify that those BTC really are "there" and not just at the moment where my OPEN.BTC leave some gateway into my BTC-Wallet-address?

[bitacer]

Dont they claim to be a crypto exchange , he  did not even know what bitshares is, I will make fun of him.

[Akado]

How did you find them ?

Here:
http://coinmarketcap.com/exchanges/volume/24-hour/

And then I mailed the small exchanges. C-CEX was the biggest one I emailed. Smaller exchanges have more to win by joining us and if we get just a few, our volume will grow quite a bit and we could then targer slightly bigger exchanges.

[bitacer]

How did you find them ?

[Akado]

I think if they used BitShares, this issue that they had wouldn't have happened

https://bitcointalk.org/index.php?topic=485029.0

Since it appears they were exploited, but not their wallets necessarily. Their database just seems to had a few errors. A database must meet the following criteria known as ACID:

Atomicity (transaction is processed as a whole, e.g. if transaction moves money from account A to B you cannot get to a situation when only one balance is updated)
Isolation (concurrent transaction do not interfere with each other)
Consistency (data always satisfies constraints)
Durability (data is stored permanently after transaction is committed)

It seems they didn't follow "Consistency" and were exploited. Look at C-CEX own comment:
Yes. One of our users were able to add about 310 BTC on his balance that he did not own. After that he bought all DRK he could and withdrew it. Our politic now is to work further. All new deposits/withdrawals/trades works instantly. We intend to reimburse all the BTC to customers, but it will take time.
This affected only BTC. All altcoin balances are accessible for trades and withdrawals.
This happen only by our own fault.

This is a point in our favour. BitShares wasn't ready back then but if it was now, we could have prevented that. But it's better if some other member with more technical knowledge explains that to C-CEX as they might have other similar questions i might not be able to answer.

Guess it was my mistake too not searching this previously. Btw @bitacer  please don't flame. I might redirect them to this thread and it's not nice to make fun of other people, specially when you're trying to bring them in.

[Akado]

It seems however he couldn't get past the fact he still needed the cold/hot wallet to be used. And because of that he assumes there's no difference in using BitShares or not.

[Shentist]

[21:25:41] Akado Sang: Thanks for the opportunity. OpenLedger can be considered a Decentralized Exchange Network which runs on top of BitShares 2.0
[21:26:11] C-CEX.com: what is bitshares?

they are trading 57 coins and he don't know 1 of the top 10 coins?

who is he living?

i would at least recognise the name, but maybe i assume to much.

so, why should a exchange join the bitshares network?

1. no database breaches/hacks of their customer accounts
2. more trading opportunities if more partners are joining the network (more liquidity)
3. if they dont have to take care of their frontend like now, they will spend a lot less in money and time
4. they could focus more in customer support and marketing

[bitacer]

I'd offer them some free donuts . lmao hahaha. I think I saw that guy before, he is that mean looking midget with tattoos all over his arms. hahaha

[Akado]

i see one big advantage is that the exchange is less likely to get hacked!

why?

because they dont have to care about userinterfaces and breaches into their database, because there is no database to be hacked.

the only point of failure is that their wallet get hacked. if you look into the past hacks of exchanges, most of them had problems, because someone
took advantage of a security breach in their database, who is holding which coins etc.

now, this risk is taken care, because the bitshares ledger keeps track of this.

i don't understand why you are trying to sell openledger to them? if they want to use bitshares they would issue their own tokens. like in ripple!

I mentioned they could also issue their own tokens. And also the fact their data base would be secured on the blockchain

edit: I acknowledge that by mentioning OpenLedger I overcomplicated things and that could have been avoided.

[Shentist]

i see one big advantage is that the exchange is less likely to get hacked!

why?

because they dont have to care about userinterfaces and breaches into their database, because there is no database to be hacked.

the only point of failure is that their wallet get hacked. if you look into the past hacks of exchanges, most of them had problems, because someone
took advantage of a security breach in their database, who is holding which coins etc.

now, this risk is taken care, because the bitshares ledger keeps track of this.

i don't understand why you are trying to sell openledger to them? if they want to use bitshares they would issue their own tokens. like in ripple!

[bitacer]

[21:41:57] C-CEX.com: I don't get your point at all
[21:42:03] C-CEX.com: Looks like non-sense
[21:42:12] C-CEX.com: I don't understand what are you trying to offer
[21:42:25] Akado Sang: Ok let me finish please

I am still laughing...   

[bitacer]

You handled it pretty good  , phew !

[Akado]

Ok so I sent a pm to Stan, Xeroc, Ronny and KenCode. Xeroc because he's usually able to help, KenCode and Stand because they know how to pitch. I only got a reply from Xeroc and he was too busy so this was my attempt at explaining them this.

Note: BitMex exchange also wants some info.


I'll copy paste the convo below.


[21:23:01] C-CEX.com: Hello!
[21:23:07] Akado Sang: Hey, thanks for the quick reply!
[21:24:16] Akado Sang: I contacted C-CEX about the possibility of the exchange looking into joining OpenLedger, giving the advantages it offers. Was told to add this account on skype, apparently to debate over that matter maybe
[21:24:48] Akado Sang: Do you want me to copy the original email?
[21:25:06] C-CEX.com: Ok. Explain it in short and simple form please What is it?
[21:25:41] Akado Sang: Thanks for the opportunity. OpenLedger can be considered a Decentralized Exchange Network which runs on top of BitShares 2.0
[21:26:11] C-CEX.com: what is bitshares?
[21:26:37] Akado Sang: It's mainly known as a "coin" but it's a financial platform running on the blockchain, where smart contracts can be made
[21:27:08] Akado Sang: Can I share a few links with you with info? You might understand it better
[21:27:43] Akado Sang: https://bitshares.org/ (don't forget to check the technology section)
[21:27:55] Akado Sang: https://www.openledger.info/
[21:28:51] Akado Sang: And there's even a referral program, where anyone can earn based on each user they refer to the network. Naturally exchanges tend to be the biggest referrers and earn more from this. They earn from each account created, for life https://bitshares.org/referral-program/
[21:30:27] C-CEX.com: oh, looks like ethereum
[21:30:28] Akado Sang: I hope this is not too overwhelming. If I may I will mention a few advantages:
- Decentralization. This means the exchange cannot be taken down or hacked like Gox.
- Transparency. Can be audited at all times. Giving it's costumers confidence about the platform they're using
- Shared Order Books. With other exchanges using the same platform, which means more market depth and liquidity
[21:31:26] Akado Sang: Yes! If we could compare both, I'd say Ethereum is like Android and BitShares like Apple. Not in the "superior" way. It's just that with Ethereum you can do more stuff. However with BitShares you can do fewer stuff, but more optimized and scalable with high performance
[21:32:48] C-CEX.com: I understand words, but I don't understand a sense
[21:32:54] C-CEX.com: Can you explain simplier?
[21:33:59] C-CEX.com: with high performance :)That I like:)
[21:35:21] Akado Sang: For example, BitShares might be more limited on some fields, meaning, it "might" not be as versatile for some stuff. But scales better and has an overall better performance. Imagine both like programming languages! Some might be harder to use/learn but are faster and have better performance. Others might allow you to program more stuff more easily but don't have such a good performance!
[21:35:48] Akado Sang: Well, if you're interested in performance you might want to check this page! https://bitshares.org/technology/industrial-performance-and-scalability/
[21:35:54] C-CEX.com: Ok. I see. but what it can do for c-cex?
[21:35:59] C-CEX.com: how it can be used?
[21:37:58] Akado Sang: Basically what we're trying to do is get more exchanges to join our network. The question you might want to know is, how does C-CEX benefit right? You get to provide a better service to your costumers.
Let's assume C-CEX has joined the network and now runs on the BitShares platform! I'll try to summarize the advantages.
[21:38:33] C-CEX.com: What "join the network" mean?
[21:39:01] Akado Sang: Join OpenLedger which aims to be a Decentralized Exchange Network. Meaning multiple exchanges operating on the BitShares Exchange
[21:39:12] Akado Sang: *means joinning OpenLedger
[21:39:26] Akado Sang: I'll try to summarize the advantages and how your business can profit from this
[21:40:04] C-CEX.com: Does that mean that I have to keep user coins balance in bitshares?
[21:41:10] Akado Sang: Well no, they keep their coins themselves! For example, as an exchange, what you give users to trade (or what most of the exchanges do) are IOUs right? It's a token representing for example a Bitcoin while in fact you hold the bitcoins on your hot/cold wallet
[21:41:57] C-CEX.com: I don't get your point at all
[21:42:03] C-CEX.com: Looks like non-sense
[21:42:12] C-CEX.com: I don't understand what are you trying to offer
[21:42:25] Akado Sang: Ok let me finish please
[21:44:23] Akado Sang: Basically all the assets of the user's would be held on the blockchain. Safe from hackers because each user would have the private keys for their own balances. Meaning C-CEX couldn't be hacked and loose costumer funds.
[21:45:03] Akado Sang: Plus they would get to use the features provided by BitShares Blockchain like multi sig, 2fA which is currently being worked on, Prediction Markets, Bond Markets, etc
[21:45:15] Akado Sang: You would provide a safer and more transparent service
[21:45:41] Akado Sang: and you would have Shared Order Books. This would increase market depth and liquidity which is what the traders seek in order to trade
[21:46:15] C-CEX.com: so they can redeem their funds without exchange?
[21:47:17] C-CEX.com: sorry, I still don't get how it works
[21:47:30] C-CEX.com: You must be not aware about how normal exchange work.
[21:47:42] C-CEX.com: This is completely incompatible with what you are talking about
[21:48:18] Akado Sang: What do you mean redeem funds? can you be more specific when you say "incompatible"?
[21:49:05] C-CEX.com: Ok. Users deposit / trade / withdraw.
[21:49:08] C-CEX.com: Let's say DOGE.
[21:49:15] C-CEX.com: How it will work with your platform?
[21:50:44] Akado Sang: Essetially C-CEX would act more like a bridge. I want to deposit DOGE on my C-CEX account. I send DOGE to your deposit address and in exchange, you credit my account with the respective amount of C-CEX.DOGE. Which could be traded against many other assets and exchanges assets AND more importantly, market pegged assets like USD and EUR to hedge against volatility. I forgot to mention that
[21:51:14] Akado Sang: Instead of the IOUs being on your database, they would be secured on the blockchain
[21:51:33] Akado Sang: allowing people to trade them against many other assets.
[21:52:18] Akado Sang: We currently have OPENBTC as OpenLedger's BTC. Imagine you join and other 3 more exchanges join. All of them trading OPENBTC. You get a shared order book with more market depth and liquidity which all traders seek
[21:52:36] Akado Sang: or you can just create your custom asset too if you prefer
[21:53:43] Akado Sang: and you also profit from each account via https://bitshares.org/referral-program/
[21:53:55] C-CEX.com: I still can't understand how it works
[21:54:05] C-CEX.com: I don't want to send users elsewhere
[21:54:29] Akado Sang: You won't send user's elsewhere, you still have your own users, they still use your exchange. Imagine OpenLedger being the backend while your C-CEX website being the front end
[21:54:51] C-CEX.com: how do they withdraw?
[21:55:41] Akado Sang: Through you or any other fiat on/off ramp connected to the network. But if they're using your exchange website, most likely they will withdraw through you, only if you allow other bridges on your site
[21:56:03] Akado Sang: I'll send you an instant exchange working with us, hopefully you can see how it works https://metaexchange.info/
[21:56:11] C-CEX.com: then what's the difference?
[21:56:18] C-CEX.com: Deposit on me, trade on me, withdraw on me...
[21:57:08] Akado Sang: While they trade and held the funds on your exchange, the assets representing their funds, are secured by the blockchain. Not to mention there are also smartcoins pegged to the price of EUR, USD, CNY to hedge against volatility.
[21:57:49] Akado Sang: You could also provide them with other features we are developing like the ones on the "Technology" section. Multi signature, Bond Markets, Prediction Markets, etc
[21:58:07] C-CEX.com: they will withdraw through youSo I will have to maintain the same doge wallet. hot and cold.
[21:58:09] C-CEX.com: no difference
[21:59:53] Akado Sang: Ok. This is my fault I'm not being able to make you understand.. Would you mind if I have a dev come here in a few days and explain it better? And I'm really sorry for taking your time.
[22:01:01] Akado Sang: I just can't explain it any better. I'm don't really possess the technical knowledge. I'm just trying to get in contact with the exchanges. Do you mind me having the devs adding you do explain it better? If you can spare the time please
[22:01:10] C-CEX.com: Yes, please.
[22:01:14] Akado Sang: Thank you very much. Thanks for taking the time.
[22:01:26] C-CEX.com: I need 1. 2. 3.
[22:01:28] C-CEX.com: how it works
[22:01:32] C-CEX.com: step by step
[22:01:43] C-CEX.com: All you say is not compatible with how real exchange work.
[22:01:53] Akado Sang: Okay. Mind if I copy/paste this convo on our forum? So it's easier to understand?
[22:02:01] C-CEX.com: Real exchange has to have wallets running online to make deposits/withdrawals possible.
[22:02:12] C-CEX.com: sure
[22:02:46] Akado Sang: Okay. Once again, thank you for your time and the opportunity. We'll be in touch it was a pleasure.
[22:03:13] C-CEX.com: thanks.

Luckily, he was kind enough to give me another chance! I really couldn't explain his last question about how he still needs a hot/cold wallet to deposit/withdraw coins so that doesn't change anything. I mentioned previously he would act as a bridge.. but honestly that question caught me off guard and I can't really explain it. I tried to emphasize the advantages. Maybe I didn't do it simple enough.


At least i had some initiative but I admit I'm not the best explaining this. I did the best I could. Now I think he's right. I might not be the best person to explain but if I couldn't explain and he couldn't understand, maybe it isn't so simple as it should be? We don't have a 1, 2 ,3 step guide on how it would work, etc. Well, we learn with our mistakes.

Atm I feel like that guy who screws up with the girls he likes but I tried, I'm at ease.

Pitch men @Stan and @kenCode please advise. I know you're really at ease explaining and pitching stuff. So, what did I do wrong, what could I have done better?
@ccedk Ronny did I miss anything? Would you have handled it differently?