Quote from: Ursium on February 27, 2014, 06:49:06 PM

Quote from: acorcos on February 27, 2014, 12:47:35 PM

Interesting article about fractional reserves and audits in the wake of the Mt Gox demise:

http://www.coindesk.com/prove-exchanges-really-money/

Firstly, I was surprised to learn that not all exchange transactions are blockchain transparent.

Secondly, as I read it, and particularly at the bit about decentralized audits, I couldn't help thinking about Ethereum as a potential solution.

Thoughts?

Two things:

1) Exchanges, decentralized or not, should be fully transparent - including accounting no matter what. Do they really hold the funds they say they do? One solution is Open Transactions, another one is independent audits.
2) Full decentralization is in my view inevitable. The second a decentralized exchange goes online, it will become the gold standard - no need to 'trust' the issuer, and users retain full control over their funds.

Once the cat is out of the bag, it's game over for centralized marketplaces, exchanges, cloud file systems, etc.

How you gonna make sure they hold enough cash?