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

[Sentinelrv]

@JordanLee, there is some criticism posted here…

https://bitcointalk.org/index.php?topic=1033773.msg11298577#msg11298577

[Cybnate]

, there is some criticism posted here…

I would call it good feedback instead of criticism. I share that the proposed reputation system is one of the weaker elements in the design. Not necessarily bad, but also not as robust as you would like to see. Definitely room for improvement, but not sure whether that can be achieved in the first release. Maybe an iterative approach is better.

[creon]

Why is that new, almost on every page someone is bringing this up: It is impossible to make a decentralized random selection using a reputation system and it also cannot work in long term if user accounts are not redistributed to new signers if the old signers go offline. It was really pointed out since day one, by many different users, and the only answer is that it is expected not to happen.

[cryptog]

if user accounts are not redistributed to new signers if the old signers go offline.

I think B&C bets on the fact that the shareholders as a whole would make sure to act swiftly in a state of emergency where the system is getting dangerously closer to situation where there are not enough trustable signers as Nu has been betting on the fact that the shareholders would act swiftly in a state of emergency in which shareholders need to raise drastically the parking rates to keep the peg…

It is basically a bet on human inventiveness and rapid response by a decentralized organization.

This is only my view.

[creon]

BKS shareholders have no influence on that, i.e. they cannot force to move the credentials of a user account from one signer to another. Even if they increase the number of signers, it doesn’t solve the problem that your particular user account still was associated to the old signers and will never go to one of the new signers if not done on a voluntary basis by the old one. So you can not deposit something on B&C and more or less forget about it, you should frequently check about the current state of signers to be sure about your coins, and make a new account every time you don’t see a sufficient number of signers online.

[mhps]

I would lilke to see this discussion on bitcointalk so it gets more view and review.

[crypto_coiner]

Important questions addressed by @JordanLee here, on the trust built on the multisig signers and comparison with other centralised/prxyasset exchange.
https://bitcointalk.org/index.php?topic=1033773.msg11305036#msg11305036

The answers are satisfying to me.

[Ben]

I still have a hard time believing that the reputation system will be that easy to manage in practice.

There’s a huge amount of overhead required to maintain trusted signers that will fall (rightfully) on the shareholders. A large amount of automation will be required to make it something that is more than just a bunch of “rubber stamp” votes.

[mhps]

As I said in the bitcointalk it might be possible that all it takes to set a signer up is downloading a peerbox-like image, initialize it on a ras-pi or a droplet, inject funds to appropriate wallets that have already built-in, and get keys. The rest is getting enough shareholders’ vote.

Compensation for all the deposit for opportunity cost and security insurance (funds always in hot wallets) is not trivial. So I guess the operational cost of B&C is not much smaller than a centralized exchange.

[Ben]

The rest is getting enough shareholders’ vote.

This is the part that concerns me, not finding the signers themselves, but providing shareholders with enough information at the right times to make informed decisions about who to upvote/downvote.

Connecting actual performance metrics of signatories to that flow of information is going to be very challenging using the blockchain as a data transport mechanism. That is, at least until third-party data processing services start to arrive.

Exercise: Mentally scale trading traffic up to 10,000/per day and try to imagine ways that your average voting shareholder is going to be able to keep up.

I agree with you that a Peerbox-esque system is a viable solution for automating the signing process.

[mhps]

imagine ways that your average voting shareholder is going to be able to keep up.

One way online shopping mall manage it is letting the user rate the transaction and use that data to generate metrics for improvement. B&C could reward the user for rating. If that can be done for B&C, voters just choose a data feed that somehow best uses the metrics. Yeah it takes work to implement.

[Ben]

One way online shopping mall manage it is letting the user rate the transaction and use that data to generate metrics for improvement. B&C could reward the user for rating. If that can be done for B&C, voters just choose a data feed that somehow best uses the metrics. Yeah it takes work to implement.

That was one of the early comments I made when I first read the white paper. I personally believe it’s critical that there’s a direct connection between the actions of the signer (as experienced by the trader who utilizes their services) and the information provided to the shareholders who will be contributing their votes to the system.

It’s not an easy problem to solve and reputation systems with “open” ratings like this have a fairly wide number of attack surfaces, but the inverse is equally dangerous if the actions of the signers aren’t directly connected to their ratings.

[mhps]

Since the job is mostly rubberstamping, not much performance is need, I’d accept to have several signers who are well known to the Nu community initially, and gradually open the signer position to a broader community as responsive rating/voting mechanism is implemented.

[Ben]

Since the job is mostly rubberstamping, not much performance is need

That’s my problem with the setup – with the critical role that signatories votes should not be rubber stamped. System performance requirements and concerns pale in comparison.

[JordanLee]

I have addressed @Ben’s concerns here on Bitcointalk.

[mhps]

That’s my problem with the setup – with the critical role that signatories votes should not be rubber stamped.

Why not? I thought the idea of multisig signing is not unlike an automated escrow service. It guarantees that trader’s fund is released as promised. For a signer there is really not much to do than just rubberstamps. Do I understand it wrong?

edit: i see that I was misunderstood by Ben. I was saying that the signers’ job is rubberstaming, not voters’. I agree voters’ job shouldn’t be rubberstamping. My understanding about the nature of the signer’s job is correct in this post, I hope ?

[Ben]

edit: i see that I was misunderstood by Ben. I was saying that the signers’ job is rubberstaming, not voters’. I agree voters’ job shouldn’t be rubberstamping. My understanding about the nature of the signer’s job is correct in this post, I hope ?

Yes, in that context I agree with you.

[Sentinelrv]

I just noticed that the previous auction in March brought in $193,819 just within this community without needing to advertise it on external forums. Also the Teehe thread on Bitcointalk has a little over 2,000 views compared to almost 12,000 views for B&C. Teehe was only about $30,000 short of its goal. I think I feel pretty confident this auction will be a success. That doesn’t mean I’m going to stop promotion though. I should be posting something later tonight that may help with people afraid to place bids due to their unfamiliarity with NuShares. It’s basically going to be a history of the Nu Network, something to get newcomers up to speed without requiring them to read the entire forum like I did.

[cryptog]

Another set of additional questions, if you do not mind:

• What would be the main difference between B&C and a smart contract-based decentralized exchange if ever the latter is possible?
• Can we increase easily the number of signers required and number of signers? Currently designed I understand that it is 8 out of 15. Any particular reason for this pair?
• How could a trusted signer increase the speed of signing a deposit request message if he or she wanted to?

Tks.

[JordanLee]

The results of the auction have been posted on Bitcointalk.org