Author Topic: How to create Shared Order Books, Increase Market Depth and Prevent FractReserve  (Read 6378 times)

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Offline complexring

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basically we need someone to invent sidechains.

You said it before I did.

Although, technically sidechains are already invented.  What we need is a proper way to implement them.

Doable?  Sure.  In a reasonable time?  Eh ... doubtful. 

The biggest issue I see is that bitcoin core doesn't even have a good idea on how to implement sidechains.  Point being that if we want to have good interoperability, some type of standardization may need to be achieved.  I say may as there could be some type of non-trivial implementation that circumvents a standardization, but works for BitShares.

Offline JonnyB

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Offline Akado

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Yes, if this was possible to have the Bitshares block chain maintaining an actual BTC deposit/withdraw address or wallet this could be a true  game changer.
Having this capability would eliminate the need for gateways, other than true fiat gateways. Because if all of us smart folks could figure out a way to integrate an actual BTC wallet (while staying 100% decentralized and being maintained under autonomous control) then we could potentially integrate "any/all" crypto wallets to the Bitshares block chain, having 100% matched/collateral backed assets.
Once done... then unequivocally we could meet the definitions of a Decentralized Exchange.
What it will take? How feasible is this?  I unfortunately don't have answers for. 
I can say with certainty though,  this would be bad ass if this could get pulled off!


I didn't meant having a btc wallet integrated on BitShares but that could be an option too!

TL;DR unable to merge, or say hard to SORT the orders. Every IOU has different inside value based on different trading fee, withdrew fee etc.

Once they're approved by the committee they get standardized, all with the same stats?
Committee has no power nor technical support to do this. You can't force exchanges to store their coins in one wallet to be scanned, for security reason they may spread the coins in many wallets/addresses, technically after every transfer the address would change. You can't force exchanges not lend out coins for interests. Let IOU's be IOU's, let the issuers manage them.

They don't atm but could if it's feasible. Andw ho said anything about forcing exchanges? I'm not forcing anyone to do anything. Assuming this is even possible, I'm just suggesting something. One service would only join if they wanted and saw advantages in this, because it has. It's just a different method. No one is forced to do anything, it's just an option. Different business models have different flavours  :) just trying to be versatile here.
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Offline abit

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TL;DR unable to merge, or say hard to SORT the orders. Every IOU has different inside value based on different trading fee, withdrew fee etc.

Once they're approved by the committee they get standardized, all with the same stats?
Committee has no power nor technical support to do this. You can't force exchanges to store their coins in one wallet to be scanned, for security reason they may spread the coins in many wallets/addresses, technically after every transfer the address would change. You can't force exchanges not lend out coins for interests. Let IOU's be IOU's, let the issuers manage them.
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Offline emailtooaj

@Akado
Yes, if this was possible to have the Bitshares block chain maintaining an actual BTC deposit/withdraw address or wallet this could be a true  game changer.
Having this capability would eliminate the need for gateways, other than true fiat gateways. Because if all of us smart folks could figure out a way to integrate an actual BTC wallet (while staying 100% decentralized and being maintained under autonomous control) then we could potentially integrate "any/all" crypto wallets to the Bitshares block chain, having 100% matched/collateral backed assets.
Once done... then unequivocally we could meet the definitions of a Decentralized Exchange.
What it will take? How feasible is this?  I unfortunately don't have answers for. 
I can say with certainty though,  this would be bad ass if this could get pulled off!





   
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Offline Akado

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TL;DR unable to merge, or say hard to SORT the orders. Every IOU has different inside value based on different trading fee, withdrew fee etc.

Once they're approved by the committee they get standardized, all with the same stats?

edit: yes, different markets allow for arbitrage opportunities. But why not both?
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Offline abit

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TL;DR unable to merge, or say hard to SORT the orders. Every IOU has different inside value based on different trading fee, withdrew fee etc.

//Update: a bit off-topic though, since they have different value, there would be opportunities for market making among these IOU's. I think alt is dong this, and provided a service for others to do this simpler.
« Last Edit: January 11, 2016, 10:29:10 pm by abit »
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Offline Akado

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We have bitBTC, OPENBTC, METAEX.BTC, TRADE.BTC and many other potential future BTC assets. or bitCNY and bitcrab'sCNY, etc What if we could merge them in the same orderbook?

The problem here is one can just print his asset and create fake BTC right? Well, to do this we could have certain criteria like providing a separate wallet address for the BTC on our exchange. Once we have this public address couldn't we just scan it and if the balance has a balance for example 2% to 5% lower than the assets issued on our chain, the committee account would automatically have power over that asset to prevent abuse.

Something like also needing the committee account permission to authorize the issue of more of that same asset. This way we could have a guarantee that the assets are backed in the blockchain and exist.

The only thing that could happen would be having the owner take away all the real assets and let the UIAs on our chain be useless but that can already happen. We assume it won't because we trust these entities.

So whoever would want to apply their asset to have this propriety and join the merged orderbook would need to have the committee to approve it via vote.

This way we would have the shared order books with more market depth and liquidity.

Only thing I don't know is how would our chain monitor the assets exist on their real chain (ie confirm X amount of BTC is on the given address on the bitcoin blockchain). Unless witnesses and/or the committee account would do that too.

So, in practice:
- Every BTC.UIA would appear simply as BTC to the users. Seeing it is a UIA can put some people off.
- UIAs would be merged on the same orderbook
- For this is needed approval from the committee to get someone of trust
- On the description of the UIA there would be the address for a single wallet holding the exact same funds as the amount issued
- This address would constantly be scanned, either each block or via committee/witness members
- The fact the address is on the UIA description would allow anyone to audit it
- If there's a small percentage gap between original address of real assets and the amount issued, committee account would be required to give permission for any operation and other possible consequences (orders being cancelled, etc)
- The fact the amounts are the same proves each asset is backed by the real deal.
- This would allow anyone to audit any exchange or service
- This would prevent any service running on a Fractional Reserve
- This would create shared order books

- This could increase market depth
- This could increase liquidity
- This could create healthier markets
- This could create better conditions for traders and services and consequently attract more.

Imagine this doesn't have any loopholes which probaby has. In the future with the proper interface someone would create an asset and choose to peg it to btc, ltc, etc. They would only need to copy/paste the original address to the board, it would be checked the amount and only that amount would allow to be issued. This of course if it was previously approved by the committee so that we only have trustworthy people with a good reputation. After approval we could even demand a fee to be paid and make money out of it since services would benefit from this feature.

Note:
This was just some brainstorm during a shower. Bare with me. I just felt the urge to post this before i forgot about it and didn't really think this through.
« Last Edit: January 11, 2016, 08:43:53 pm by Akado »
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