Re: [ANN][XCP] Counterparty Protocol, Client and Coin (built on Bitcoin) - Official
This is an interesting concept but I don't expect widespread adoption of XCP.
First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.
Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.
I hope I'm proven wrong though!
First of all, its use is very limited. I don't think it will win over a single professional trader ever. In this time and age of HFT (high frequency trading) in most markets, especially the very liquid ones, where latencies are counted by the microseconds, the pace of 1 block per 10 minutes is not really going to cut it. This alone already rules out liquid markets like FX, MM, rates equities and commodities, where 99.999% of the trades are. Low Lack liquidity in XCP will translate to huge spreads and slippage from hell, making it unprofitable to trade through XCP, which in turn hurts liquidity. You can't break that vicious circle unless you can compete with the lightning speed and market depth at the exchanges. Unfortunately I don't see that ever happening. And oh, the exchange fees in these very liquid markets are negligible, especially for high volumes, so no advantage for XCP there either.
Mind you I'm not dismissing XCP, it's fantastic technology and it will have many novel applications. But I just don't think it's going to have the same level of impact as bitcoin, which was truly a paradigm shift.
I hope I'm proven wrong though!
The assumption seems wrong: this is NOT competing with lighting quick forex and stock trades but rather allows for various p2p scenarios or DA-X financial and trade scenarios . It opens up a whole new decentralized world of not only currency to currency p2p exchange but any form of trade not dependent on speed. in fact, not being ONLY a currency- this opens up further usages and markets that are not possible with JUST a currency.
As far as the liquidity circle: NOT right- with enough volume the denominations would be 0.0000 etc just like BTC. With REAL 10 or 12 digit annual volume, and just like BTC it doesnt really matter if the starting point is 12M, 40M or 2.6M.