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The 0x protocol will allow for decentralized exchanges, so hacks like this would be a thing of the past if it gains adoption. https://0xproject.com/ https://0x

by LAMike 9y ago

The 0x protocol will allow for decentralized exchanges, so hacks like this would be a thing of the past if it gains adoption. https://0xproject.com/ https://0xproject.com/

ReverseCold 9y ago
It's still impossible to have a decentralized exchange convert between USD and a coin. XEM (the coin that was stolen) doesn't have plans to implement 0x, but there are other plans for decentralized exchange.
- csomar 9y ago
  Why not? By using a usd-token like usdt it become possible. Bitshare usd also has been very stable lately and it is fully decentralized.
  - vkou 9y ago
    A usd-token requires trust that the token issuer isn't just printing magic internet money. You've just moved your point of failure from the exchange, to the token issuer. All evidence points to USDT being just that - magic internet money, with nothing backing it.
    - cryptonitez 9y ago
      Dozens of exchanges risking their reputation on it suggest otherwise.
      - conanbatt 9y ago
        Do you honestly believe Tether has 2.2 billion dollars in a bank account? Tether is a huge red flag to me..Enron level.
        cryptonitez 9y ago
        Yes, the I believe the sum of fiat deposited on bitfinex, bittrex, huobi,... is close to that amount. I even see people from high school "investing" in crypto now. It's really not hard to believe when you consider how many millions of people are on these exchanges. Binance touts 3 million users, and has 425,819,642 tethers. 141$ average a user is completely believable.
        vkou 9y ago
        You're being taken in by a basic accounting trick. Let's suppose I buy 100 USDT on an exchange. What Tether claims happens: 0. Bob and I own $100. Tether and Bittrex own nothing. 1. Bob sends $100 to Tether Limited. 2. Tether limited sends Bob 100 USDT. They now have $100 in their bank account. 3. Bob transfers 100 USDT to bittrex. 4. I send $100 to bittrex. I buy 100 USDT using that $100 from Bob. 5. Bob withdraws his $100 from Bittrex. I withdraw my 100 USDT from Bittrex. 6. Now, I own 100 USDT, Bob owns $100, Bittrex owns nothing. 7. Tether Limited has to hold $100 in reserve. It's not their money - it's supposed to be backing USDT. In addition to having assets of $100, they also have $100 of liabilities. The reality: Steps 0-6 are the same. Step 7: Tether Limited buys a vacation to the Bahamas with their $100, and ignores the $100 liability. They are actually insolvent, and I have no recourse against them, because the Tether TOS make it very clear that I cannot redeem my USDT for USD from them. The whole point of tether is that it is supposed to be backed 1:1 with USD in Tether Limited's accounts. They have not proven to anyone that this is actually the case. For all we know, all that money went to the Bahamas, or a Swiss bank account, and they are just issuing USDT, pocketing what people pay them for it, and keeping none of it in reserve.
        MatekCopatek 9y ago
        While I think you're absolutely right in general, there are a few exchanges that are registered as serious financial institutions, which means they need to follow stricter regulation and actually back 100% of their user's assets. As far as I know at least Coinbase and Bitstamp are among these.
      - vkou 9y ago
        I'm not sure if you're legitimately confused on this subject, or are deliberately misinforming people. Just because an exchange trades tether doesn't mean their reputation is staked on it. Exchanges do not vouch for the instruments that are being traded on them. Tether is issued by Tether Limited, which is a shell corporation wholly owned and controlled by one exchange - Bitfinex. Not 'dozens of exchanges.' Allegedly, when someone gives Tether Limited $1 USD, they give that person 1 USDT. In reality, Tether has never actually been audited, and for all we know, they just give themselves 1 USDT, and sell it on the market... Without keeping a 1:1 reserve.
  - Daishiman 9y ago
    Somebody has to guarantee that the the USD are actually there to perform a trade. There's no other way to guarantee that that doesn't imply going off-chain.
    - AlexSolution 9y ago
      MakerDAO uses collateralized smart contracts to provide stability to their Dai token. Right now, only ETH can be used as collateral, but in Q2 they are starting multi-collateral support. https://makerdao.com/ https://makerdao.com/ https://coinmarketcap.com/currencies/dai/ https://coinmarketcap.com/currencies/dai/
      - Daishiman 9y ago
        Their whitepaper's explanation of how this works is horrendously complicated. There's no way you can encode that sort of logic into a cryptocoin in a bug-free manner. Steer clear of this.
        AlexSolution 9y ago
        Their contracts are up. If you can find a way to exploit one of the bugs, you can profit massively.
        dingo_bat 9y ago
        If your profit is massive enough they may even roll back the chain and do a hard fork!
      - sleepychu 9y ago
        And who will abitrate the collateral? While it's smart wallets and crypto currency it can be enforced by cryptographic proof but when the collateral is USD then it's going to have to exist somewhere.
        Daishiman 9y ago
  - naveen99 9y ago
    I like bitshares and own some. But it's not decentralized. Its delegated proof of stake I think.
- jv22222 9y ago
  OmiseGo is building a decentralized exchange that converts between USD and a coin (any coin any currency). http://www.tristone-llc.com/omisego-the-global-standard-for-exchange-and-payments/ http://www.tristone-llc.com/omisego-the-global-standard-for-...
  - 0wing 9y ago
    Isn't that just what Kraken or Coinbase already does? Someone needs to be the operator of exchange between fiat and crypto, at which point they and you will be subject to tax and regulation. Anyone who operates an exchange is subject to money transmitter laws and KYC laws. Anytime you convert from cryptocoins to fiat, you're subject to capital gains tax if you're a US citizen. https://www.usatoday.com/story/tech/2014/01/27/bitcoin-dealers-charged-with-money-laundering/4941313/ https://www.usatoday.com/story/tech/2014/01/27/bitcoin-deale... https://cointelegraph.com/tags/localbitcoins https://cointelegraph.com/tags/localbitcoins
    - jv22222 9y ago
      > Isn't that just what Kraken or Coinbase already does? No. It's more akin to an operating system of money rather than a proprietary siloed app.
      - 0wing 9y ago
        Except you can't get usable fiat out? There needs to be an endpoint distributor of physical cash, SWIFT, or wire transfers of real fiat and those end points are subject to regulation just like localbitcoins or ATM machines are subject to regulation. Can you explain how a decenteralized exchange provides USD? abstracted IOU "stable-tokens" like Tether are NOT USD, see the case of Liberty Reserve [1] or [2] [1] https://en.wikipedia.org/wiki/Liberty_Reserve https://en.wikipedia.org/wiki/Liberty_Reserve [2] https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87 https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... https://medium.com/@bitfinexed/are-fraudulent-tethers-being-used-for-margin-lending-on-bitfinex-5de9dd80f330 https://medium.com/@bitfinexed/are-fraudulent-tethers-being-...
- chisleu 9y ago
  Someone in the Stellar community is working on that.
coralreef 9y ago
0x is specific to ERC20 tokens though, staying strictly on the Ethereum main chain. There are some other decentralized exchanges in development however.
lawlessone 9y ago
Lol, hope it isn't made using Solidity
- wrboyce 9y ago
  Care to elaborate on these hopes? And the underlying humour…
  - larkeith 9y ago
    There's a lot of sentiment against Solidity as a language, for fairly good reason. See: https://news.ycombinator.com/item?id=14810008 https://news.ycombinator.com/item?id=14810008 https://news.ycombinator.com/item?id=14691212 https://news.ycombinator.com/item?id=14691212
    - KMag 9y ago
      Solidity answers the question "What if smart contracts used a lot of implicit behavior to hide necessary (as opposed to incidental) complexity, and used a JavaScript-like syntax and encouraged intermediate state mutation in order to attract your average web front-end-developer?"
wooshy 9y ago
Loopring as well
bazza451 9y ago
Work in progress and only erc20. Surprises me that Komodo keeps going under the radar. Nearly 30,000 atomic swaps between btc/zcash protocol coins and a working decentralized exchange (BarterDex) with assetchains. Just demonstrated one of the first implementations of a btc/erc20 swap as well. https://www.komodoplatform.com/en https://www.komodoplatform.com/en

by LAMike 9y ago

The 0x protocol will allow for decentralized exchanges, so hacks like this would be a thing of the past if it gains adoption. https://0xproject.com/ https://0xproject.com/

ReverseCold 9y ago

It's still impossible to have a decentralized exchange convert between USD and a coin. XEM (the coin that was stolen) doesn't have plans to implement 0x, but there are other plans for decentralized exchange.

csomar 9y ago
Why not? By using a usd-token like usdt it become possible. Bitshare usd also has been very stable lately and it is fully decentralized.
- vkou 9y ago
  A usd-token requires trust that the token issuer isn't just printing magic internet money. You've just moved your point of failure from the exchange, to the token issuer. All evidence points to USDT being just that - magic internet money, with nothing backing it.
  - cryptonitez 9y ago
    Dozens of exchanges risking their reputation on it suggest otherwise.
    - conanbatt 9y ago
      Do you honestly believe Tether has 2.2 billion dollars in a bank account? Tether is a huge red flag to me..Enron level.
      - cryptonitez 9y ago
        Yes, the I believe the sum of fiat deposited on bitfinex, bittrex, huobi,... is close to that amount. I even see people from high school "investing" in crypto now. It's really not hard to believe when you consider how many millions of people are on these exchanges. Binance touts 3 million users, and has 425,819,642 tethers. 141$ average a user is completely believable.
        vkou 9y ago
        You're being taken in by a basic accounting trick. Let's suppose I buy 100 USDT on an exchange. What Tether claims happens: 0. Bob and I own $100. Tether and Bittrex own nothing. 1. Bob sends $100 to Tether Limited. 2. Tether limited sends Bob 100 USDT. They now have $100 in their bank account. 3. Bob transfers 100 USDT to bittrex. 4. I send $100 to bittrex. I buy 100 USDT using that $100 from Bob. 5. Bob withdraws his $100 from Bittrex. I withdraw my 100 USDT from Bittrex. 6. Now, I own 100 USDT, Bob owns $100, Bittrex owns nothing. 7. Tether Limited has to hold $100 in reserve. It's not their money - it's supposed to be backing USDT. In addition to having assets of $100, they also have $100 of liabilities. The reality: Steps 0-6 are the same. Step 7: Tether Limited buys a vacation to the Bahamas with their $100, and ignores the $100 liability. They are actually insolvent, and I have no recourse against them, because the Tether TOS make it very clear that I cannot redeem my USDT for USD from them. The whole point of tether is that it is supposed to be backed 1:1 with USD in Tether Limited's accounts. They have not proven to anyone that this is actually the case. For all we know, all that money went to the Bahamas, or a Swiss bank account, and they are just issuing USDT, pocketing what people pay them for it, and keeping none of it in reserve.
        MatekCopatek 9y ago
        While I think you're absolutely right in general, there are a few exchanges that are registered as serious financial institutions, which means they need to follow stricter regulation and actually back 100% of their user's assets. As far as I know at least Coinbase and Bitstamp are among these.
    - vkou 9y ago
      I'm not sure if you're legitimately confused on this subject, or are deliberately misinforming people. Just because an exchange trades tether doesn't mean their reputation is staked on it. Exchanges do not vouch for the instruments that are being traded on them. Tether is issued by Tether Limited, which is a shell corporation wholly owned and controlled by one exchange - Bitfinex. Not 'dozens of exchanges.' Allegedly, when someone gives Tether Limited $1 USD, they give that person 1 USDT. In reality, Tether has never actually been audited, and for all we know, they just give themselves 1 USDT, and sell it on the market... Without keeping a 1:1 reserve.
- Daishiman 9y ago
  Somebody has to guarantee that the the USD are actually there to perform a trade. There's no other way to guarantee that that doesn't imply going off-chain.
  - AlexSolution 9y ago
    MakerDAO uses collateralized smart contracts to provide stability to their Dai token. Right now, only ETH can be used as collateral, but in Q2 they are starting multi-collateral support. https://makerdao.com/ https://makerdao.com/ https://coinmarketcap.com/currencies/dai/ https://coinmarketcap.com/currencies/dai/
    - Daishiman 9y ago
      Their whitepaper's explanation of how this works is horrendously complicated. There's no way you can encode that sort of logic into a cryptocoin in a bug-free manner. Steer clear of this.
      - AlexSolution 9y ago
        Their contracts are up. If you can find a way to exploit one of the bugs, you can profit massively.
        dingo_bat 9y ago
        If your profit is massive enough they may even roll back the chain and do a hard fork!
    - sleepychu 9y ago
      And who will abitrate the collateral? While it's smart wallets and crypto currency it can be enforced by cryptographic proof but when the collateral is USD then it's going to have to exist somewhere.
      - Daishiman 9y ago
- naveen99 9y ago
  I like bitshares and own some. But it's not decentralized. Its delegated proof of stake I think.
jv22222 9y ago
OmiseGo is building a decentralized exchange that converts between USD and a coin (any coin any currency). http://www.tristone-llc.com/omisego-the-global-standard-for-exchange-and-payments/ http://www.tristone-llc.com/omisego-the-global-standard-for-...
- 0wing 9y ago
  Isn't that just what Kraken or Coinbase already does? Someone needs to be the operator of exchange between fiat and crypto, at which point they and you will be subject to tax and regulation. Anyone who operates an exchange is subject to money transmitter laws and KYC laws. Anytime you convert from cryptocoins to fiat, you're subject to capital gains tax if you're a US citizen. https://www.usatoday.com/story/tech/2014/01/27/bitcoin-dealers-charged-with-money-laundering/4941313/ https://www.usatoday.com/story/tech/2014/01/27/bitcoin-deale... https://cointelegraph.com/tags/localbitcoins https://cointelegraph.com/tags/localbitcoins
  - jv22222 9y ago
    > Isn't that just what Kraken or Coinbase already does? No. It's more akin to an operating system of money rather than a proprietary siloed app.
    - 0wing 9y ago
      Except you can't get usable fiat out? There needs to be an endpoint distributor of physical cash, SWIFT, or wire transfers of real fiat and those end points are subject to regulation just like localbitcoins or ATM machines are subject to regulation. Can you explain how a decenteralized exchange provides USD? abstracted IOU "stable-tokens" like Tether are NOT USD, see the case of Liberty Reserve [1] or [2] [1] https://en.wikipedia.org/wiki/Liberty_Reserve https://en.wikipedia.org/wiki/Liberty_Reserve [2] https://hackernoon.com/the-curious-tale-of-tethers-6b0031eead87 https://hackernoon.com/the-curious-tale-of-tethers-6b0031eea... https://medium.com/@bitfinexed/are-fraudulent-tethers-being-used-for-margin-lending-on-bitfinex-5de9dd80f330 https://medium.com/@bitfinexed/are-fraudulent-tethers-being-...
chisleu 9y ago
Someone in the Stellar community is working on that.

coralreef 9y ago

0x is specific to ERC20 tokens though, staying strictly on the Ethereum main chain. There are some other decentralized exchanges in development however.

lawlessone 9y ago

Lol, hope it isn't made using Solidity

wrboyce 9y ago
Care to elaborate on these hopes? And the underlying humour…
- larkeith 9y ago
  There's a lot of sentiment against Solidity as a language, for fairly good reason. See: https://news.ycombinator.com/item?id=14810008 https://news.ycombinator.com/item?id=14810008 https://news.ycombinator.com/item?id=14691212 https://news.ycombinator.com/item?id=14691212
  - KMag 9y ago
    Solidity answers the question "What if smart contracts used a lot of implicit behavior to hide necessary (as opposed to incidental) complexity, and used a JavaScript-like syntax and encouraged intermediate state mutation in order to attract your average web front-end-developer?"

wooshy 9y ago

Loopring as well

bazza451 9y ago

Work in progress and only erc20. Surprises me that Komodo keeps going under the radar. Nearly 30,000 atomic swaps between btc/zcash protocol coins and a working decentralized exchange (BarterDex) with assetchains. Just demonstrated one of the first implementations of a btc/erc20 swap as well. https://www.komodoplatform.com/en https://www.komodoplatform.com/en