RE: Bitfinex hack means it's a great time to buy bitcoin -cough- I mean BitShares

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Bitfinex hack means it's a great time to buy bitcoin -cough- I mean BitShares

in bitshares •  8 years ago 

A decentralized exchange would be fantastic! The only way to do that is pure crypto to crypto. There has to be a mechanism to on ramp fiat to crypto and there are automated ways to support that today. Maybe the next true DAO can be a self functioning decentralized exchange that pays profits to it's users. We can dream.

Not all is lost with Finex. I posted about it here and there will be an announcement later today. https://steemit.com/investment/@venomspike/hacked-but-not-lost-bitfinex-announcement-today-and-light-at-the-end-of-the-tunnel#comments

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Actually, there is more to it than that.
There are several ways to trade arbitrary cryptos on the BitShares exchange.

  1. Exchanges issue their own IOUs for, say, Bitcoin as something like open.BTC or trade.BTC.
  2. Anyone could set up a market pegged asset. There is one for Bitcoin on the blockchain called bitBTC.
  3. Eventually we'll have sidechain technology to make trading between chains automagic.

Method 1 has counterparty risk, but you are only exposed to it for a few moments while you are entering/exiting the market.
Method 2 has no counterparty risk, you are protected by collateral held for that purpose in a smart contract on the blockchain.
Method 3 has even more power and we'll have to see how it gets implemented.

Good input, still reflects my point that cryptos are the only possible exchange at the moment. Even if we're talking IOU's or pegged assets, the underlying is a crypto.

Even if we take it a step further and use pegs for fiat based assets like USD, it doesn't solve the problem of actually transferring and accounting for dollars. The existing financial system isn't "programmable" and has no on ramp that can eliminate human intervention (or custody in some cases)

Love the third idea. Any method that eliminates counterparty risk is beneficial, and using sidechains to exchange value makes perfect sense.