Re: Announcing Project Invictus: a P2P Exchange Collaboration
Criteria used to create an ideal P2P Distributed Exchange:
I'm really presuming the word 'ideal' isn't in the above line. I'm not even sure if an ideal p2p exchange could work. Ideally I could trade you my gold bar for bitcoins truslessly, but there are myriad issues that prevent that. I think we should compartmentalise what we want these exchanges to do, more so than just 'a p2p exchange', and more like 'a p2p fiat exchange', 'a p2p fiat and cryptocoin exchange', etc.No one is trading any gold bars trustlessly, so whomever comes up with the next best POSSIBLE thing, has figured out the "ideal."
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.)
There are two parts to a trade - matching and locking the orders, and transferring value. "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." Really I think this means "When you are watching a graph of trades and you would like to make a trade at that current price, you must be able to do so, or have the same ability to do so as every other member of the exchange". Trades with fiat can't be instantaneous, but locking in a price can be.
You're shooting too low, it certainly is possible. We must duplicate the instantaneous nature of fiat->crypto trading that mtgox currently offers.
In fact we must be even faster. The market demands it.
What this requires, of course, is that criteria 6 be an actual transference of value.
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...)
Where did the 'value' term go? You've now removed the reference to generic money and are specifically talking about fiat.
I have intentionally loosened this wording in order to allow for some more creative alternatives. Since I wrote the last one, I've seen a couple of systems that have figured out ways to move the value, but the value didn't represent fiat very well at all. (A flexible amount in both cases.) No matter what, the "prime directive" of replacing fiat must be for it to have all the charachteristics of money... (Divisibility, durability, fungability, scarcity, portability & malleability) Those are being overlooked by people with otherwise very creative ideas... So I re-worded to both loosen for creativity's sake, yet enforce that requirement.Also, a 'perfect representation of fiat' doesn't really mean anything because there is no perfect representation.
As my dad once said, "I find your lack of faith disturbing." 
I happen to know of one such solution now, although I can't be sure that everyone will agree it's "perfect." It will likely be "the best we can think of" again though.