Both parties need to commit to trades at the same time. Otherwise,
1) seller offers bitcoin for coloredUSD
2) buyer accepts offer
3) seller signs his side of txn (seller can no longer back out)
4) buyer watches bitcoin price
If bitcoin price goes up, sign txn -> profit
If bitcoin price goes down, do not sign txn -> find new seller offering more better exchange rate.
You need to force people to move simultaneously. Otherwise the party who moves first will always take a loss. (i.e. it is like the seller is giving away a free option)
1) seller offers bitcoin for coloredUSD
2) buyer accepts offer
3) seller signs his side of txn (seller can no longer back out)
4) buyer watches bitcoin price
If bitcoin price goes up, sign txn -> profit
If bitcoin price goes down, do not sign txn -> find new seller offering more better exchange rate.
You need to force people to move simultaneously. Otherwise the party who moves first will always take a loss. (i.e. it is like the seller is giving away a free option)
Ouch reality hits hard.
It would only be an "option" as long as there is no other party that could swoop in and actually execute the trade.
I'll go back to messing with my RepRap printer and solving the halting problem. Thanks for the reality check.
