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

[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.