Date: Sat, 1 Mar 2014 11:45:13 -0600
From: Troy Benjegerdes <hozer@hozed.org>
To: Jorge =?iso-8859-1?Q?Tim=F3n?= <jtimon@monetize.io>
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User-Agent: Mutt/1.5.21 (2010-09-15)
Cc: bitcoin-development@lists.sourceforge.net
Subject: Re: [Bitcoin-development] Decentralized digital asset exchange with
 honest pricing and market depth
Precedence: list

> > You can make the same argument against Bitcoin itself you know...
> >
> > A Bitmessage-like network would be trivial to front-run via a sybil
> > attack. It's the fundemental problem with marketplaces - the data
> > they're trying to publish has to be public.
> 
> I don't see the Bitcoin analogy...
> Anyway, I still don't think the seller cares, if he sells at the price
> he was asking, what would he care about "front running" those parallel
> networks.
> I've seen many street markets without "public information" and they
> work just well.

The spot price for ammonia fertilizer, refined gasoline at terminals, 
and price of tea in china are not 'public information', yet these are
some of the largest traded commodities in the world, far exceeding 
the drop in the bucket that all cryptocoin transactions make.

I'd further argue that the *actual* price of corn (cash bid price at
elevators and ethanol plants) is not public information either. There
is a great deal of money traded in collecting and then distributing the
'cleared price' information. Have a look at 
http://www.interquote.com/template.cfm?navgroup=aboutlist&urlcode=12&view=1

 
> >> I don't think this will be a tragedy, because like we discussed on
> >> IRC, I don't think the primary goal of markets is price discovery, but
> >> trade itself.
> >>
> >> About historic data, the actual trades are always public, and some
> >> kind of "archivers" could collect and maintain old orders for historic
> >> bid and asks, etc.
> >
> > And again, how do you know that record is honest? Fact is without
> > proof-of-publication you just don't.
> 
> Well, the trades that appeared in the chain actually occurred.
> Buying to yourself at fake prices? Be careful, the miner could just
> separate the order and fill it himself. Or anyone paying a higher fee,
> for that matter.

You just made my long-term strategic argument for investing in my own
mining hardware so I can be sure to trade reliably.

> Again, you haven't addressed why the seller cares more about "accurate
> historic market data" than just his own fees and sell.
> 
> > You mean a reverse nLockTime that makes a transaction invalid after a
> > certain amount of time - that's dangerous in a reorg unfortunately as it
> > can make transactions permenantly invalid.
 
People who take money from buyers and sellers care most about 'accurate 
historic market data'. I just want to exchange my corn for e85, fertilizer,
and electricity, and audit the code that runs accounting for the exchange.

I really don't give a shit if there is 'accurate historic market data' as
long as **MY** personal trade data is accurate and I got a good enough price,
and I know who I'm dealing with.

I know someone smarter than me and with more money, market leverage, and 
political connections **WILL** game the system and distort the market data
history so they can take more money from buyers and sellers without actually
doing some usefull market function. 

As long as use buyers and sellers can see the code, and have a good eye for
knowing when someone's pushing the market around, we can just put our orders
in and relieve some speculators of their money.

Just get me working code for cross-chain trades, and we'll work on the 
accurate historic data problem later.

----------------------------------------------------------------------------
Troy Benjegerdes                 'da hozer'                  hozer@hozed.org
7 elements      earth::water::air::fire::mind::spirit::soul        grid.coop

      Never pick a fight with someone who buys ink by the barrel,
         nor try buy a hacker who makes money by the megahash