Quote from: charleshoskinson on June 10, 2013, 04:46:02 PM

Stage one of Invictus is to figure out a working definition of a p2p exchange based on a set of criterion and create some sort of comparison chart to see where everyone's implementation falls.

To that end I've been revising the criteria list a bit recently, and here's my most recent draft:

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Criteria used to create an ideal P2P Distributed Exchange:

1. It must be without any central points of failure. Like bitcoin, DEX must be designed to withstand government attack. I suggest a bitorrent-like overall schematic with no blockchain. It must also be completely distributed (not just decentralized) and open source.

2. It must present a very large number of possible trades to choose from. As many trades as possible being presented at a time should be the goal, so that assets can form a stable price. (e.g. All clients in a region can see that Bitcoin is going for $150.)

3. It must transact trades almost instantaneously. When you are watching a graph of trades in your region and want to trade at a very specific time, you must be able to do so. (This is extremely important for arbitragers and other traders who help keep the price fluctuation down.)

4. It must offer Graphs and APIs for for graphing. -All online trading platforms do this, even Mt.Gox. Each client should offer it's own API feed showing all trades in it's region.

5. It must have three-user (trustless) trading. So a non-interested 3rd party always hosts the trade between the buyer and seller, providing escrow too. To prevent the middleman from theft himself, 2-of-3 escrow should be employed.

6. It must hold and transfer a perfect representation of fiat currency. This encrypted device must be designed from the ground up to be transferable yet not counterfeitable, and be traded in the same denominations of real fiat money. It also must have a very high likelihood of being redeemable for the fiat money it represents, which makes it a 'digital IOU,' yet with all of the characteristics of sound money. (Divisibility, fungibility, Malleability, Scarcity, etc...)

7. It must not be assumed that individual users have access to less information than the network as a whole. A typical mistake in coding large P2P networks like bitcoin is to assume that it can be coded in such a way where one client or peer on the network can be restricted in access as not to see information elsewhere in the network. This also means that the the network as a whole cannot authorize things that an individual peer can't. Both are demonstrably false in the kind of environment this system requires.

8. It must be easy enough for Laymen to understand. (The grandmother clause) An ideal distributed exchange must be easy enough for laymen to make their first trade on. Therefore, it cannot require extensive understanding of cryptography, code, cryptocurrencies, nor even economics to operate. The intended enduser should always be thought of as a grandma who just learned what a bitcoin is and wants to buy one.

Now how to get everyone to agree to a final? Taking a vote on this kind of thing would be like herding cats, so what can we do to best ensure that it is something that mostly all of us agree on to be in everyone's interests?