[Passed] Motion to provide seed funding for B&C Exchange - a decentralized exchange built on the Peershares platform


#511

Got the same extra converted NuShares addresses, too here


#512

FYI, Coinffeine, another Peer-to-Peer Bitcoin exchange launched its BETA today: http://blog.coinffeine.com/2015/07/21/coinffeine-launches-worlds-first-decentralized-bitcoin-exchange-70-countries/


#513

Can anybody explain/elaborate to me what is decentralized in Coinffeine?
I gave it a read, but could not detect anything decentralized


#514

I agree, it really just replaces a website with an app where settlements are arranged directly among users. It’s still bottlenecked by the transaction frequency of the blockchain and by the costs/risks of traditional payment processors, although it does take exchange hacks out of the picture.


#515

I downloaded the client and also don’t really understand it. It asks you to login with OKCoin. Maybe that’s just BETA. But yeah, like you said, it just replaces the website.


#516

This thread might help. The decentralized exchange development watcher thread
What i got is that it is based on smart contracts but i feel it will not achieve anything useful sadly.


#517

Well, beside all the criticism, you hold bitcoins locally versus transfer to an exchange. This is the “breakthrough” we all should be looking at.
If they “hack” coinffeine website, they won’t take your shares.

I suggest everybody to read and try to participate to the r/Bitcoin discussion and learn from community reaction :


#518

OK - but you cant hold bitcoins locally in a self contained manner (for size issue) unless you are big enough


#519

Ok, so Coinffeine is the equivalent of buying BTC in a exchange, depositing money in very small quantities, withdrawing immediately the bought BTC and repeating the process over and over again? What is the advantage? Why would I want to add Coinffeine to the equation and add more risk, because it is more automated?

I only see another piece of software, and with it new risks such as malicious code or bugs. As long as Coinffeine can make and verify the transactions for you, it is in fact, taking control over your bitcoin wallet and OKcoin account.


#520

I am not sure I understand this correctly.

Not at all, where di you read this? I am not familiar with their design at all, but if it’s anywhere near Bitsquare or Lighthouse design, Coinfeine is an open source wallet with some multi-sig and collateralization feature.


#521

yep, they were all there right after importing from NSR wallet


#522

No. It is not a wallet. It is a client that connects to your running bitcoin wallet https://github.com/Coinffeine/coinffeine/blob/master/coinffeine-peer/src/main/scala/coinffeine/peer/bitcoin/BitcoinPeerActor.scala and uses your OKpay login data https://github.com/Coinffeine/coinffeine/blob/master/coinffeine-peer/src/main/scala/coinffeine/peer/payment/okpay/OkPayClient.scala to access your account on your behalf and make/verify payments. Just like a bot.


#523

Do/can you hold bitcoin locally on your local machine from the first place?


#524

Which “bitcoin wallet” ?

Okpay is for fiat, not crypto .

from user manual

The first step expects you to introduce the OKPay wallet ID and seed token. This information will be used by Coinffeine to consume the OKPay API to send and receive fiat payments. The second step shows a resume of your Bitcoin wallet, including the public address where you can transfer some funds to start exchanging.

https://github.com/Coinffeine/coinffeine/wiki/Exchange-algorithm


#525

I have another set of questions about the design of B&C.

In my understanding, a trader that wants to use B&C Exchange will only need to access the Web interface (provided by a server) without having to download any blockchain.

So the following risks still remain:

  • risk of DDoS of the web site: no access to the web site
    –> Any particular envisioned way to minimize that?

  • hacking of your account: a rogue user could steal your login credentials and steal your money.
    –> Would your password be stored in the server or in the browser a la blockchain.info or somewhere else?

In order words, no “money” would be stored by a hot/cold wallet centralized by the service itself but you could still be stolen your account.

Am I correct?

Thank you.


#526

Such websites permit access to the B&C Exchange network, but they will not actually be a part of the network. In order to provide access, such websites will run the B&C Exchange client (either on the same server but ideally a separate one) and allow the web server to access the B&C Exchange client to communicate with the B&C Exchange network. So, even if the DDoS attack is severe and extremely successful, it will have zero effect on the B&C Exchange network, because it will only affect the web server.

Because the website will use only the B&C blockchain as its database, users will not be dependent on the website to access their exchange account. They can use another website or the B&C Exchange client itself.

It is possible to launch a DDoS against B&C Exchange. Such an attack would be extremely lucrative for BlockShare holders, so we can only hope someone is foolish enough to do it. While the fees for B&C Exchange will be determined by shareholders in real time, one BlockCredit per kilobyte might be a reasonable choice. In that case, a DDoS attack will bring revenues of around $1000 per minute.

Login credentials will be nothing more than a BlockCredit private key, which will never be known to the server. It will stay in the browser using javascript, in some ways similar to blockchain.info. It is different from blockchain.info in that they store encrypted private keys on their servers, and there will be no need to do that in our case. Without a backup, blockchain.info users cannot access their Bitcoins if blockchain.info suddenly ceases operations. In contrast, B&C Exchange users will be able to access their exchange account if the website suddenly ceases operations through any other user interface.

It is true that if an attacker gains access to one’s BlockCredit private key they can steal all funds in the exchange account, just like if an attacker gains access to a Bitcoin private key they can steal the Bitcoins.


[Discussion] Additional features we want for B&C Exchange
#527

Is there any data about Centralized and decentralized Exchange’s Average No. of daily trades So we can Roughly Calculate B&C’s Profitability?
Unlike Nu, B&C is not the first, and historical data should be used to assist Expected Revenues and Compare it to the Blockshares Current Price, At least as a Marketing move!


#528

My quick and dirty attempt.

If B&C volume is 1% of today’s total BTC volume ($0.3M, size of bittrex), divendends is $0.2/10k/mo. Reaching 10% (BTC-e) the dividends will be $2/10k/mo. Reaching 30% (Bitfinex) it will be $6.7/10k/mo.

note that 10k bks then is 1 bks now.


#529

I did my own Too dirty attempt minute ago depending on JL calculations by assuming that the DDoS attack would need 1000 times the usual network transactions!

and surprisingly it turned out to give the same result as your least expectation

Thanks @mhps , this helps.


#530

The calculations seem to be valid considering on the assumptions they are based on.
One difference between traditional (centralized) exchanges and BCE is the fee model.
At traditional exchanges you pay a fee for a successful transaction (buy/sell), but nothing for placing or deleting orders.
That’s different at BCE, because each transaction has a size and requires a fee.
So BCE is foremost interesting for buying and selling big amounts (values) of coins. It’s interesting because the security of BCE is higher than that of centralized exchanges and the fee is not per transaction (value of transaction) amount, but per transaction volume (transaction size in the blockchain).

For that reason I expect BCE to “underperform” in terms of “fee per transaction volume (USD)” compared to the exchanges we know.
It will be hard to change that. Raising the fees would be an obvious measure to adjust this, but if BCE really wants to be decentralized, it should not offer a decentralized trading place for whales, but for all people.
That’s the reason why the fee per byte should only be raised to a certain level.

I’d very much like to see a layered fee model where customers can choose the security level by choosing different m-of-n multi signature options that can have different fees per byte.
That way you could keep BCE affordable for people trading comparably small amounts while requesting a disproportionately higher fee for big (USD volume) transactions (disproportionately, because more signatures already lead to bigger transaction sizes).

Now I’m far from understanding the inner working of BCE and I’m not sure whether the details are already designed.
So far I only know about multi signature related to deposit addresses. I don’t know how order transactions will be designed.

By current BCE design (page 3) only one level of multi signature will be voted on by the shareholders

So the only way to steer the “fee per traded USD value” is to make use of another vote that is in the design

If you limit the maximum trade size you effectively have a kind of “fee per traded USD volume”

My idea regarding different fee levels might make things overly complicated (or impossible at all).
Following the Unix philosophy (and I recognize the Peershares design follow that very successful philosophy) it might be better to create another fork (or forks) of BCE with a different set of “multi signature / maximum trade size” settings. Maybe I should call that instance instead of fork.
Technically it would be a fork, but from customer perspective it might be an instance, still BCE, but with a different flavor.
Transferring coins between different BCE instances would only be a matter of transferring them between “accounts” as the UTXO from the multi signature addresses would only be sent to a different multi signature address (on another BCE instance) in a combination of a withdraw (from one BCE instance) and a deposit (on another BCE instance).
Even 0-confirmation transactions between BCE instances might be possible, because either one or the other multi signature address would be in control of the coins. That would require to identify the deposit address as a BCE multi signature address (not sure whether and if how that is possible).

As long as the protocol for different BCE instances stays the same, the development efforts should not be much higher compared to one BCE instance.
Economically the different instances would need to be treated as different corporations, different entities with independent ownership.
Initially the shareholders would be identical. And even if that changes over time there’s a big incentive for shareholders not to hard fork from (the) other BCE instance(s) and follow the development of the main dev team.

I want to voice idea that early - it might be included in development decisions; just in case that sounds useful…


Got unwanted Blockshares due to holding Nushares? Sell them!
Got unwanted Blockshares due to holding Nushares? Sell them!