5 ms·

> Exchanges can be decentralized. It's technically possible and likely the future of cryptocurrencies. Would you mind explaining how? I can't see how it's poss

> Exchanges can be decentralized. It's technically possible and likely the future of cryptocurrencies. Would you mind explaining how? I can't see how it's possible to do the money side of the transfer in a decentralised way

kordless 13y ago
If you are talking about fiat currency, the most obvious and current way of doing it in a decentralized fashion is to pay your power bill while mining for alt-currencies. You pay USD for electricity, the electricity is used for a portion of the payment infrastructure, provides services for it, and you get paid for it with coin. You've effectively turned a payment to your electric company into coin in a highly decentralized way. For crypto exchanges, there are several ways to do this including Ripple, Ethereum (when it is done) and Mastercoin. See this article on the exchange Mastercoin is launching in March: http://www.cryptocoinsnews.com/2014/01/31/mastercoin-is-launching-a-distributed-exchange-on-march-15/ http://www.cryptocoinsnews.com/2014/01/31/mastercoin-is-laun...
dmix 13y ago
Vendor model, decentralized exchanges serve as the transfer, mediation, and escrow point. Vendors and consumers take care of sending/receiving fiat currency. Ala localbitcoin except decentralized. Then there is no single point of failure. It then becomes regulation vs (hundreds of)thousands of individuals and small operations. Compared to regulation of a few mega-exchanges. This would result in a critical increase in the complexity of the regulatory environment. Assuming the government gets serious about it, enforcement of the regulation will become a media side-show similar to the war on drugs. Taking down a few prominent individuals, parading them in the news, but barely hurting market supply/demand.
- rubinelli 13y ago
  Why would consumers worry about whether there is a single point of failure in the Bitcoin economy? What they do worry is whether they will be able to take their money out when they want it, and that means fewer, larger, and supposedly more trustworthy exchanges.
  - dmix 13y ago
    > Why would consumers worry about whether there is a single point of failure in the Bitcoin economy? Consumers will worry when it becomes either illegal or prohibitively expensive to operate centralized Bitcoin exchanges, which is the likely outcome. That will quickly lead to a oligopoly of 2-3 exchanges dominating the market, just like every heavily-regulated market where it's too expensive for small shops to compete legally. Then you'll have a Paypal type experience where money/BTC is constantly withheld and all transactions are under surveillance. Defeating many of the benefits of Bitcoin (privacy and fluidity). > What they do worry is whether they will be able to take their money out when they want it Consumers don't need to worry about taking money out of decentralized exchanges. Since exchanges don't hold their money. That's the whole point: a) Disconnecting the massive BTC wallets storage on exchange servers, instead they are strictly for facilitating transactions (escrow is built into the BTC protocol) b) P2P distributed hosting of exchange servers so operating "trustless" exchanges can't become outlawed
    - rubinelli 13y ago
      You do realize that what cryptolibertarians and regular consumers value is drastically different, right?
      - dmix 13y ago
        For now :) The things I mentioned are the inherent value in BTC. If you want regulated centralized exchanges then you might as well just keep your fiat currency and PayPal.
throwwit 13y ago
http://business.financialpost.com/2013/01/31/apple-files-patent-application-for-human-atm-network/ http://business.financialpost.com/2013/01/31/apple-files-pat...

kordless 13y ago

If you are talking about fiat currency, the most obvious and current way of doing it in a decentralized fashion is to pay your power bill while mining for alt-currencies. You pay USD for electricity, the electricity is used for a portion of the payment infrastructure, provides services for it, and you get paid for it with coin. You've effectively turned a payment to your electric company into coin in a highly decentralized way. For crypto exchanges, there are several ways to do this including Ripple, Ethereum (when it is done) and Mastercoin. See this article on the exchange Mastercoin is launching in March: http://www.cryptocoinsnews.com/2014/01/31/mastercoin-is-launching-a-distributed-exchange-on-march-15/ http://www.cryptocoinsnews.com/2014/01/31/mastercoin-is-laun...

dmix 13y ago

Vendor model, decentralized exchanges serve as the transfer, mediation, and escrow point. Vendors and consumers take care of sending/receiving fiat currency. Ala localbitcoin except decentralized. Then there is no single point of failure. It then becomes regulation vs (hundreds of)thousands of individuals and small operations. Compared to regulation of a few mega-exchanges. This would result in a critical increase in the complexity of the regulatory environment. Assuming the government gets serious about it, enforcement of the regulation will become a media side-show similar to the war on drugs. Taking down a few prominent individuals, parading them in the news, but barely hurting market supply/demand.

rubinelli 13y ago
Why would consumers worry about whether there is a single point of failure in the Bitcoin economy? What they do worry is whether they will be able to take their money out when they want it, and that means fewer, larger, and supposedly more trustworthy exchanges.
- dmix 13y ago
  > Why would consumers worry about whether there is a single point of failure in the Bitcoin economy? Consumers will worry when it becomes either illegal or prohibitively expensive to operate centralized Bitcoin exchanges, which is the likely outcome. That will quickly lead to a oligopoly of 2-3 exchanges dominating the market, just like every heavily-regulated market where it's too expensive for small shops to compete legally. Then you'll have a Paypal type experience where money/BTC is constantly withheld and all transactions are under surveillance. Defeating many of the benefits of Bitcoin (privacy and fluidity). > What they do worry is whether they will be able to take their money out when they want it Consumers don't need to worry about taking money out of decentralized exchanges. Since exchanges don't hold their money. That's the whole point: a) Disconnecting the massive BTC wallets storage on exchange servers, instead they are strictly for facilitating transactions (escrow is built into the BTC protocol) b) P2P distributed hosting of exchange servers so operating "trustless" exchanges can't become outlawed
  - rubinelli 13y ago
    You do realize that what cryptolibertarians and regular consumers value is drastically different, right?
    - dmix 13y ago
      For now :) The things I mentioned are the inherent value in BTC. If you want regulated centralized exchanges then you might as well just keep your fiat currency and PayPal.

throwwit 13y ago

http://business.financialpost.com/2013/01/31/apple-files-patent-application-for-human-atm-network/ http://business.financialpost.com/2013/01/31/apple-files-pat...