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Isn't the idea of a central exchange (which "Magic the Gathering online exchange" is), where most of the trading occurs, a little antithetical to notion of a di

Isn't the idea of a central exchange (which "Magic the Gathering online exchange" is), where most of the trading occurs, a little antithetical to notion of a distributed currency?

Mahn 14y ago
Absolutely, but a true p2p, decentralized Bitcoin exchange service has yet to happen.
- vy8vWJlco 14y ago
  Paper IOUs seem almost ideal, if we didn't have to rely on a central issuing authority to make them universally accepted. IOUs are easy to replicate with blind signatures (see Section 4, Examples: http://web.mit.edu/6.857/OldStuff/Fall02/handouts/L15-voting.pdf http://web.mit.edu/6.857/OldStuff/Fall02/handouts/L15-voting... ) but noone wants to hunt down as many people as they have bills, just to trade the individually-issued digital IOUs... This is what Ripple ( http://ripple.com http://ripple.com ) claims to do, though: act as a distributed clearing house to resolve and cancel debt via a social graph. I haven't had a chance to actually use Ripple though, so I am certainly not recommending it specifically, just observing that it seems to address the right problem - that money is just debt - whereas Bitcoin simply creates a finite resource to be fought over.
minimax 14y ago
The problem is moving the counter currency around. I can zap you some bitcoins without any problems, but it's much harder for you to zap me back some USD (or EUR, JPY, whatever).
- vy8vWJlco 14y ago
  Fair, the ForEx role will never go away, but it seems that MtGox has also become a trading platform for the Bitcoins themselves, with the obvious downside that it is susceptible to DDoS' like any centralized service. It makes more sense for a P2P currency that this simply be done at the protocol level with at most a custom client, but one that is still a full peer. The problem I, and others, are seeing is that the blockchain is becoming huge and will only get bigger, meaning only those with the resources to maintain it will participate as full peers - hardly ideal for a distributed system since it will inevitably require a certain amount of centralization to scale.
  - codeulike 14y ago
    Fair, the ForEx role will never go away, but it seems that MtGox has also become a trading platform for the Bitcoins themselves Wait, whats the difference between those two things? Converting bitcoins into anything else _is_ ForEx.
    - vy8vWJlco 14y ago
      MtGox has become something of a speculative trading platform. While direct exchange (cash in, cash out) will always be necessary (unless you are paid in Bitcoins and live off of Bitcoins), I don't think MtGox is mostly being used that way. Rather, MtGox is becoming synonymous with Bitcoins for traders, and people want to use it like a bank (with all the problems that entails, and Bitcoin was partially hoped to relieve). As such, Bitcoin is only as reliable as MtGox. If People's main interaction with MtGox was buying Bitcoins for use on real goods and services, then I would agree that it is just another exchange, but people aren't using it like that. People buy BTC with USD one day, and buy CAD with BTC the next, with every intention of going back through the exchange and the Bitcoin currency again in order to cash out. MtGox has an API, and in fact, you are right, that is precisely what a ForEx is used for... I'm not knocking it, only pointing out that many of the problems people want Bitcoin to solve are being recreated by re-imposing conventional institutional roles. As long as there is more than one currency, people will need to exchange them. Who am I to say Bitcoin "shouldn't" have a trading platform other than to note that, IMHO, anyone who uses MtGox speculatively is relying on it's centralization, with all that that entails. I think it's ultimately just a matter of scale.
      - codeulike 14y ago
        People buy BTC with USD one day, and buy CAD with BTC the next, with every intention of going back through the exchange and the Bitcoin currency again in order to cash out. Are you sure they're doing that?? Bitcoins volatility would render it pointless for Forex trading. (edit: by which I mean trading between two old school currencies via bitcoin)
        14y ago
fnordfnordfnord 14y ago
MtGox isn't the only exchange, just the largest.
dragonwriter 14y ago
> Isn't the idea of a central exchange (which "Magic the Gathering online exchange" is), where most of the trading occurs, a little antithetical to notion of a distributed currency? No, its a demonstration of network effects and natural monopoly in an unregulated market.

Isn't the idea of a central exchange (which "Magic the Gathering online exchange" is), where most of the trading occurs, a little antithetical to notion of a distributed currency?

Mahn 14y ago

Absolutely, but a true p2p, decentralized Bitcoin exchange service has yet to happen.

vy8vWJlco 14y ago
Paper IOUs seem almost ideal, if we didn't have to rely on a central issuing authority to make them universally accepted. IOUs are easy to replicate with blind signatures (see Section 4, Examples: http://web.mit.edu/6.857/OldStuff/Fall02/handouts/L15-voting.pdf http://web.mit.edu/6.857/OldStuff/Fall02/handouts/L15-voting... ) but noone wants to hunt down as many people as they have bills, just to trade the individually-issued digital IOUs... This is what Ripple ( http://ripple.com http://ripple.com ) claims to do, though: act as a distributed clearing house to resolve and cancel debt via a social graph. I haven't had a chance to actually use Ripple though, so I am certainly not recommending it specifically, just observing that it seems to address the right problem - that money is just debt - whereas Bitcoin simply creates a finite resource to be fought over.

minimax 14y ago

The problem is moving the counter currency around. I can zap you some bitcoins without any problems, but it's much harder for you to zap me back some USD (or EUR, JPY, whatever).

vy8vWJlco 14y ago
Fair, the ForEx role will never go away, but it seems that MtGox has also become a trading platform for the Bitcoins themselves, with the obvious downside that it is susceptible to DDoS' like any centralized service. It makes more sense for a P2P currency that this simply be done at the protocol level with at most a custom client, but one that is still a full peer. The problem I, and others, are seeing is that the blockchain is becoming huge and will only get bigger, meaning only those with the resources to maintain it will participate as full peers - hardly ideal for a distributed system since it will inevitably require a certain amount of centralization to scale.
- codeulike 14y ago
  Fair, the ForEx role will never go away, but it seems that MtGox has also become a trading platform for the Bitcoins themselves Wait, whats the difference between those two things? Converting bitcoins into anything else _is_ ForEx.
  - vy8vWJlco 14y ago
    MtGox has become something of a speculative trading platform. While direct exchange (cash in, cash out) will always be necessary (unless you are paid in Bitcoins and live off of Bitcoins), I don't think MtGox is mostly being used that way. Rather, MtGox is becoming synonymous with Bitcoins for traders, and people want to use it like a bank (with all the problems that entails, and Bitcoin was partially hoped to relieve). As such, Bitcoin is only as reliable as MtGox. If People's main interaction with MtGox was buying Bitcoins for use on real goods and services, then I would agree that it is just another exchange, but people aren't using it like that. People buy BTC with USD one day, and buy CAD with BTC the next, with every intention of going back through the exchange and the Bitcoin currency again in order to cash out. MtGox has an API, and in fact, you are right, that is precisely what a ForEx is used for... I'm not knocking it, only pointing out that many of the problems people want Bitcoin to solve are being recreated by re-imposing conventional institutional roles. As long as there is more than one currency, people will need to exchange them. Who am I to say Bitcoin "shouldn't" have a trading platform other than to note that, IMHO, anyone who uses MtGox speculatively is relying on it's centralization, with all that that entails. I think it's ultimately just a matter of scale.
    - codeulike 14y ago
      People buy BTC with USD one day, and buy CAD with BTC the next, with every intention of going back through the exchange and the Bitcoin currency again in order to cash out. Are you sure they're doing that?? Bitcoins volatility would render it pointless for Forex trading. (edit: by which I mean trading between two old school currencies via bitcoin)
      - 14y ago

fnordfnordfnord 14y ago

MtGox isn't the only exchange, just the largest.

dragonwriter 14y ago

> Isn't the idea of a central exchange (which "Magic the Gathering online exchange" is), where most of the trading occurs, a little antithetical to notion of a distributed currency? No, its a demonstration of network effects and natural monopoly in an unregulated market.