Re: Announcing Project Invictus: a P2P Exchange Collaboration
As my dad once said, "I find your lack of faith disturbing." 
I am always ready to be proven wrong, especially when the benefit of the community is at stake.
With that said, what is the logical result of a P2P exchange in the extreme? Every individual *is* an exchange.
It seems to me this depends on how we look at that last sentence. Is Marketcoin a P2P exchange in the extreme? How do you then reconcile the idea of a unified single system such as Marketcoin. On the other hand, looking at systems like Bitcoin, one can argue that every individual *is* a bank, and so I can see that it can be resolved with a particular frame of reference.
Ultimately this is a small point to argue, but I'd like to see some academic investigation into it. (Though now is not the time or place to try and resolve such differences since I think we can all agree you're certainly correct enough for this conversation).
I think there currently 4 categories of exchanges: 1) those like local-bitcoins or OTC 2) those like Mt. Gox 3) those based upon decentralized issuers of 'dollar-denominated crypto-currency' that can be traded / exchanged via systems like MarketCoin or even anonymous exchanges. and last but not least, dollar-denominated crypto-currency without any specific issuer and that has value *independent* from any individual backing it.
Assuming you can have a dollar-denominated crypto-currency with no issuers *then* you have already achieved the ultimate P2P exchange where *everyone* is an exchange you no longer require a system to 'pair' the highest USD/BTC bidder against the lowest 'ask'. Everyone who wants into a dollar-denominated crypto-currency is a match against everyone who wants out of it and back into paper dollars. Therefore, it is as decentralized as possible.
Assuming you can have a dollar-denominated crypto-currency with no issuers *then* you have already achieved the ultimate P2P exchange where *everyone* is an exchange you no longer require a system to 'pair' the highest USD/BTC bidder against the lowest 'ask'. Everyone who wants into a dollar-denominated crypto-currency is a match against everyone who wants out of it and back into paper dollars. Therefore, it is as decentralized as possible.
I agree that 4. is the ideal, though I'm not sure how easily it can be achieved. Still need to read the BitShares whitepaper though, so don't take my word for it. As a side point, I'd anticipate that Marketcoin would be compatible with such systems.
I am going to go one-step further and claim that BTCLuke and I both require a nearly identical blockchain based trading platform. We both require collateral with a crypto-currency. All that remains to be solved is:
1) how are new dollar-denominated crypto-bonds issued?
2) how is the collateral requirement determined?
3) how is default detected and the collateral paid out?
4) how is the bond fulfilled?
1) how are new dollar-denominated crypto-bonds issued?
2) how is the collateral requirement determined?
3) how is default detected and the collateral paid out?
4) how is the bond fulfilled?
A lot of 'ifs' there, though I look forward to your solutions
I have answers to the 4 questions, and would like to see what answers BTCluke has.
I think I've found a way around the 3rd party in one case. I'm sooooooooo close to having it all documented...
For normal trading, such as buying USD with Bitcoins, or Bitcoins with USD, I'm still planning to use the 3rd party to actually move the values of the currencies after the trade has "been made" in real time.
For purchasing the representation of the USD, I think there is a semi-trustless 2-way exchange option. (Yes, with no central authorities.) I'll detail it in my upcoming whitepaper.
For normal trading, such as buying USD with Bitcoins, or Bitcoins with USD, I'm still planning to use the 3rd party to actually move the values of the currencies after the trade has "been made" in real time.
For purchasing the representation of the USD, I think there is a semi-trustless 2-way exchange option. (Yes, with no central authorities.) I'll detail it in my upcoming whitepaper.
more
. I look forward to it.3a. It must match 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.
3b. It must be possible to fulfill matched trades almost instantaneously if the chosen fiat transfer mechanism allows it.
3b. It must be possible to fulfill matched trades almost instantaneously if the chosen fiat transfer mechanism allows it.
I agree with this, it's certainly a two part issue, and I think this separation is important.
On the note of using SSL style systems, these are probably one of the better ways of dealing with the issues fiat raises, and it helps p2p trade of fiat without needing to buy into a cryptocurrency solution; as always there's two sides of the coin, but having more options is always beneficial.
Has anyone else thought about applying for a grant from the Bitcoin Foundation?. I'm applying for one with Marketcoin; though only a little one to begin with. If anyone has systems they'd like to develop but don't have the funds I'd really encourage it. Peter, Gaving and Lindsay all encouraged me to write one for Marketcoin. You can find my application here: https://github.com/XertroV/MarketcoinWhitepaper/blob/master/GrantProposal-Q2-2013.md
Edit: Tumak has updated the crosschain p2ptrade algorithm to be clearer, please find the updated version here: https://github.com/bitcoinx/colored-coin-tools/wiki/crosschain-p2ptrade