Quote from: spyder12 on March 20, 2017, 12:05:11 AM

Quote from: bancornetwork on March 19, 2017, 02:53:57 PM

However, in the domain of currency exchange, we still have a Double Coincidence of Wants, where a bid/ask is required.

I disagree with this completely. Bid/Ask is a function of the market's supply/demand and it is the current price one can buy/sell at.

Bid/Ask is not a "Function", rather, it is a mechanism for liquidity and price-discovery. The point we are making is that this is not the only single possible mechanism, and definitely not the best one for every use-case.

Quote from: spyder12 on March 20, 2017, 12:05:11 AM

If I want to buy a coin/token that has very few holders and doesn't trade on major exchanges I can do so, selling is difficult, but that is the nature of buying something that does not have much demand and is thinly traded.

This is incorrect. How can you buy a token which doesn't trade on major exchanges? Your ability to buy the token is a function of the ask orders in the exchanges, just as your ability to sell it is a functions of the bid orders. The asymmetry your describe here simply does not reflect the reality.

Quote from: spyder12 on March 20, 2017, 12:05:11 AM

Your are trying to solve for illiquid assets, but are phrasing it in terms of coincidence of wants which is incorrect.

Illiquidity is a direct result of the double coincidence of wants problem. Just imagine a token, for which there is on average a single buyer and a single seller per week. The chances for the coincidence of matching the two are slim, and the only option would be for buyers/sellers to wait for days until a match is found, which would also result in a very poor price-discovery process. Using Bancor's reserve mechanism, the buyers and sellers would be able to instantly convert their token, and the price will be adjusted over time, by the contract, toward an equilibrium between buys and sells of the token.

Quote from: spyder12 on March 20, 2017, 12:05:11 AM

And with altcoins/tokens it typically is not supply which is an issue as there are millions of coins issued in each instance. The issue is purely demand.

This is also incorrect. The supply in the exchanges is not the same as the money-supply. Even if there are millions of coins which are issued, it does not automatically translate to ask orders in the exchanges. Additionally, Bancor-compatible tokens are self-issued according to their demand, so the arguments that "millions of coins issues" simply does not apply here.

Quote from: spyder12 on March 20, 2017, 12:05:11 AM

You are trying to create demand via a derivative mechanism. This will only be useful though to those coins/tokens that can't support demand on their own and as there is no real demand for the coins/tokens themselves you are creating a way for those who own them to extract some value out of the derivative portion (i.e. reserves) which almost everyone will do as the coins/tokens cannot stand on their own.

We are not "trying to create demand", as the demand is organically created by the market. The difference is that using the Bancor-protocol, a low demand (or lack there of) is reflected in the price, which may drop to near-zero for token with no intrinsic value, however, liquidity -- which is purely a function of the chances to match two "bartering" parties -- would cease be a challenge.