Quote from: gollum on April 12, 2013, 10:47:11 AM

We are theorizing about developing a new decentralized p2p bitcoin exchange, or actually an exchange for any possible asset.
Could you please review this template and contribute with suggestions based on your experience in trading, or problems in the model we describe here?
My intention is to make a simplistic model of the futures exchange market that is in harmony with the bitcoin protocol.
https://github.com/p2p/bitcoin-exchange
https://bitcointalk.org/index.php?topic=172705.0

Happy to do so.

However in order to understand if your proposal works you must first be clear about what specific separate issues this you are trying to overcome, that way you can test your theorums against those objectives.

I would imagine the issues include:

1 - Creating resilience against a DDOS/hacking attack.

2 - Creating a diversification away from a single operator dominated market.

3 - Being able to trade fast and with depth of liquidity.

4 - To create certainty of payment for both BTC and Fiat flows.

As a very quick reply, my answers would be:

1 - I'm not a techie, but I'd guess it's harder to DDOS multiple sites, but easier to hack the weakest link in the chain.

2 - This is already happening naturally, poor service means people leave to other sites.

3 - This will depend on how much depth each broker has and how quickly they can cross-trade.

4 - This is the big issue and it's even harder with lots of small operators.

What you must understand is that in most developed markets, such as gold/forex/oil whilst there are often many dozens of firms you can trade with, all of them are regulated, have substantial backing and the risks of failing is small (albeit that Lehman etc has somewhat changed that). Central exchanges exist for that purpose, thay are the people guaranteeing settlement.

The best thing for this market would be to have someone come is with real financial strength and credibility either into a new or existing exchange to provide certainty of settlement on transactions as well as being able to invest in a more enterprise-level infrastructure.