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> If you put 20 BTC into an exchange (in promise for 550 ETH or whatever), but the exchange goes bankrupt... you lose both your BTC and your ETH. You have to go

> If you put 20 BTC into an exchange (in promise for 550 ETH or whatever), but the exchange goes bankrupt... you lose both your BTC and your ETH. You have to go through the courts to try to get your money back. That's actually solvable with atomic swaps [1]. They anable you to trustlessly exchange crypto currencies at an agreed on price. [1] https://en.bitcoin.it/wiki/Atomic_swap https://en.bitcoin.it/wiki/Atomic_swap

dragontamer 8y ago
Nifty trick! Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency), which is probably the bigger exchange that most people use. ---------- The second issue is that BTC / ETH prices can change dramatically. Set your timer too long: and your opponent can use time to take advantage of the trade... only executing it when the BTC/ETH exchange floats towards their favor. Because BTC / ETH prices vary dramatically on a day-to-day basis, "gaming" the exchange price is going to be trickier. With a traditional exchange, you either market order (always get a price, immediately), or limit-order (get the price as soon as the threshold is reached).
- scoopitywoop 8y ago
  This is what stablecoins are for, such as USDT, TUSD, etc. I'm sure you'll bring up the point that you still need exchanges for USD -> stablecoin. You can alternatively use crypto ATMs, or trade with someone you know.
  - dmitriid 8y ago
    There’s no reality in which the scam commonly known as Tether is a stablecoin.
  - dragontamer 8y ago
    Stablecoins rely on the trust of the company to float the value of the USD or whatever currency with the coin that is generated. USDT is owned and operated by a single, foreign company that hasn't had an audit yet and has no insurance protections what-so-ever. I'm not going to trust them with my money or business. This about the worst of all cases: they pretend to be a blockchain, but they're really just a standard old bank operating without any regulatory behavior what-so-ever.
    - omarchowdhury 8y ago
      There is significant competition growing against Tether. The following three stablecoins have $500M+ in circulation all backed by US regulated companies: USDC, TUSD, and GUSD.
      - dragontamer 8y ago
        > all backed by US regulated companies That means they aren't actually cryptocoins. That means those are banks, which are backed by the court system and the ability to sue those banks for your money if they mess up.
        omarchowdhury 8y ago
        > That means they aren't actually cryptocoins. That's not the argument here. I'm showing you that there are legitimate alternatives to USDT.
  - jeffrwells 8y ago
    Trading with someone you know ruins the point of a trustless system. If that person ends up duping you, then you need to sue them (litigation)
- jstanley 8y ago
  > Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency) The fact that it's impossible to implement trustless atomic swaps in USD is a USD problem, not a Bitcoin problem. You asked how Bitcoin avoids litigation, you were given an example, and you dismissed it because it doesn't work on fiat. The reason Bitcoin had to be invented is precisely because these things aren't possible in fiat.

dragontamer 8y ago

Nifty trick! Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency), which is probably the bigger exchange that most people use. ---------- The second issue is that BTC / ETH prices can change dramatically. Set your timer too long: and your opponent can use time to take advantage of the trade... only executing it when the BTC/ETH exchange floats towards their favor. Because BTC / ETH prices vary dramatically on a day-to-day basis, "gaming" the exchange price is going to be trickier. With a traditional exchange, you either market order (always get a price, immediately), or limit-order (get the price as soon as the threshold is reached).

scoopitywoop 8y ago
This is what stablecoins are for, such as USDT, TUSD, etc. I'm sure you'll bring up the point that you still need exchanges for USD -> stablecoin. You can alternatively use crypto ATMs, or trade with someone you know.
- dmitriid 8y ago
  There’s no reality in which the scam commonly known as Tether is a stablecoin.
- dragontamer 8y ago
  Stablecoins rely on the trust of the company to float the value of the USD or whatever currency with the coin that is generated. USDT is owned and operated by a single, foreign company that hasn't had an audit yet and has no insurance protections what-so-ever. I'm not going to trust them with my money or business. This about the worst of all cases: they pretend to be a blockchain, but they're really just a standard old bank operating without any regulatory behavior what-so-ever.
  - omarchowdhury 8y ago
    There is significant competition growing against Tether. The following three stablecoins have $500M+ in circulation all backed by US regulated companies: USDC, TUSD, and GUSD.
    - dragontamer 8y ago
      > all backed by US regulated companies That means they aren't actually cryptocoins. That means those are banks, which are backed by the court system and the ability to sue those banks for your money if they mess up.
      - omarchowdhury 8y ago
        > That means they aren't actually cryptocoins. That's not the argument here. I'm showing you that there are legitimate alternatives to USDT.
- jeffrwells 8y ago
  Trading with someone you know ruins the point of a trustless system. If that person ends up duping you, then you need to sue them (litigation)
jstanley 8y ago
> Unfortunately, it doesn't generalize to BTC / USD (or other fiat currency) The fact that it's impossible to implement trustless atomic swaps in USD is a USD problem, not a Bitcoin problem. You asked how Bitcoin avoids litigation, you were given an example, and you dismissed it because it doesn't work on fiat. The reason Bitcoin had to be invented is precisely because these things aren't possible in fiat.