Popular Post Hodor Posted September 24, 2017 Popular Post Share Posted September 24, 2017 I've done some research on the trend of decentralized exchanges, and I think traders might need to start taking a look at these options - I talk about the impact on worldwide regulations and also my take about how it will affect XRP & Ripple. With China being the first country to seriously step in the way of crypto-currency trading, I think the trend towards serious adoption of decentralized exchanges might be in our future. Is this a good thing? Maybe... I hope you enjoy the read! Please leave any feedback below and feel free to share on any other media. My blog announcements on other media: Twitter Reddit Bitcointalk - alt coin sub forum Bitcointalk - XRP speculation thread mvenneau, tijmen90, Malloy and 8 others 7 4 Link to comment Share on other sites More sharing options...
Vacek_aka_Luschka Posted September 24, 2017 Share Posted September 24, 2017 As always Hodor, Excellent article ! Hodor 1 Link to comment Share on other sites More sharing options...
mvenneau Posted September 24, 2017 Share Posted September 24, 2017 Im glad you wrote an article on this @Hodor ive been reading up on this all day. Love watching how all this is evolving, seems like getting into the whole crypto world 3 weeks ago is the most exciting times for everything lol. Its especially reasurring that all the "bad" news just makes xrp seem like a more sound investment. Addressing how the dialect between BTC and xrp holders goes was spot on lol. Just like in the real world, people like to flock to whatever everyone else is doing and accept the general opinion with no research. I think in time public opinion will change, once they see Ripple/xrp isnt going anywhere. Hodor 1 Link to comment Share on other sites More sharing options...
mvenneau Posted September 24, 2017 Share Posted September 24, 2017 (edited) Could you go into further detail of the AML? What kind of methods could they use to enforce this or identify this? What about moneypools investing into something? How does AML decipher those that are getting donations say youtubers etc, those that are actually getting gifts for investments(14,000 a year max tax free from anyone), and people actually money laundering? Is this just a concept or is it a working model? @Hodor. Edited September 24, 2017 by mvenneau Hodor 1 Link to comment Share on other sites More sharing options...
enrique11 Posted September 25, 2017 Share Posted September 25, 2017 (edited) Here's an older thread from bitcointalk where one individual compares them to one another, their pros and cons. I wonder if there is a site that makes these comparisons that is updated: https://bitcointalk.org/index.php?topic=1338970.0 (Posted January 24, 2016, 04:54:21 AM) "IMO, one necessary piece of the decentralized and autonomous puzzle that gets wrongly neglected is decentralized exchanges (DEXs.) I think that, for good reason, DEXs will be a big market in the cryptocurrency space. As time goes on, more and more centralized exchanges keep: 1. Going bankrupt 2. Getting hacked 3. Offering little to no transparency 4. Operating on fractional reserves 5. Faking volume 6. Onerous KYC/AML requirements 7. Withdraw delays/holds 8. Participating in insider trading 9. Limitations and preferential treatment of coins added 10. Delisting & enlisting blackmail 11. Withdraw delays due to verification/KYC/security reasons I feel like eventually people will transition to decentralized exchanges after getting tired of the issues listed above. DEXs are necessary for completely decentralized and autonomous commerce to happen. This thread is intended to track the development and features of DEXs. Feel free to bump the thread with updates or new projects. I am not really sure which design is best at this point. This is intended to be a neutral thread, but feel free to discuss the pros and cons of each implementation. Which design is the best, or is the best solution yet to come? What ideas (if any) do you have to improve the DEXs' designs? Do you know of any other DEXs in existence/development? (in alphabetical order) B&C Exchange - Status: Vaporware Dead Project? - Website: https://bcexchange.org/ - BCT Thread: https://bitcointalk.org/index.php?topic=1033773.0 - Whitepaper: https://bcexchange.org/assets/Blocks_&_Chains_Decentralized_Exchange.pdf - Powered by an autonomous network of multi-signature addresses - FIAT derivative Strengths: - No derivatives or IOUs (for cryptocurrencies) - FIAT IOUs Weaknesses: - Vaporware BitBay - Status: Released - Website: http://bitbay.market/ - BCT Thread: https://bitcointalk.org/index.php?topic=890531 - Wallet Downloads: https://bcexchange.org/assets/Blocks_&_Chains_Decentralized_Exchange.pdf Strengths: - Working implementation - Fully decentralized peer to peer trading via atomic swaps - No derivatives, multisignature gateways, or IOUs - Effectively, the DEX feature of BitBay is a decentralized version of LocalBitcoins - The only DEX that allows for FIAT/Crypto trading without gateways, derivatives, or IOUs Weaknesses: - To be updated once I have time to do more research and better analyze it... Bitshares - Status: Released - Website: https://bitshares.org/ - Forums: https://bitsharestalk.org/ - SPV Wallet: https://bitshares.openledger.info/#/ Strengths: - Working implementation - Oldest and most established DEX - Commodities, stocks, etc., derivatives are possible - FIAT derivatives - User issued assets Weaknesses: - Systematic risk of derivatives and IOUs - Low volume and liquidity (although improving slowly) - Lack of development Blocknet - Status: Released - Website: http://blocknet.co/ - BCT Thread: https://bitcointalk.org/index.php?topic=829576.0 Strengths: - Fully decentralized peer to peer trading (via atomic swaps) - No derivatives, multisignature gateways, or IOUs Weaknesses: - You must download the entire blockchain of each coin you want to trade, have the wallets running, and configure the RPC username/pass* - Trading is only working in the command line. A GUI for trading has not yet been released. InstantDEX - Status: Released - Website: http://www.instantdex.org/ - BCT Thread: https://bitcointalk.org/index.php?topic=684090.0 - Forum: http://forum.instantdex.org/ - Fully decentralized peer-to-peer trades via atomic swaps - Can access several different sources of liquidity, including: Nxt assets (including Multigateway coins) and centralized exchanges via API keys Strengths: - Working implementation - Fully decentralized peer to peer trading (via atomic swaps) - Optionally utilize centralized exchanges' APIs for additional market depth and liquidity. Weaknesses: - You can only trade IOUs in the form of Nxt user issued assets - You must download the entire blockchain of each coin you want to trade, have the wallets running, and configure the RPC username/pass* Waves - Status: Released - Website: https://wavesplatform.com/ - BCT Thread: https://bitcointalk.org/index.php?topic=1387944.0 - Wallet (Chrome App): https://wavesplatform.com/#downloads_anchor Strengths: - Working implementation - SPV wallet - Lots of developer funding - FIAT IOUs via gateways - Centralized order matching allows quicker trades - Utilizes gateways allowing deposit/withdrawal of real assets Weaknesses: - Centralized order matching and gateways make Waves more centralized than most other DEXs - You can only trade IOUs via gateways or other user issued assets. * You will not have to download the entire blockchains once SPV nodes are made compatible. It is also possible to make a multicoin SPV wallet so you don't have to download the blockchains, and you don't need to run several cryptocurrency's wallets separately. Try to stay on topic. I will only delete posts sparingly... please no trolling or personal attacks, and try to make sure your post has some substance." Edited September 25, 2017 by enrique11 Malloy, mvenneau, GiddyUp and 1 other 2 2 Link to comment Share on other sites More sharing options...
Hodor Posted September 25, 2017 Author Share Posted September 25, 2017 42 minutes ago, mvenneau said: Could you go into further detail of the AML? What kind of methods could they use to enforce this or identify this? What about moneypools investing into something? How does AML decipher those that are getting donations say youtubers etc, those that are actually getting gifts for investments(14,000 a year max tax free from anyone), and people actually money laundering? Is this just a concept or is it a working model? @Hodor. AML (Anti money laundering) varies by country, but I think to be effective with crypto-currency, different countries will need to collaborate on some approaches that make sense with the technology. I do not have a good idea of what these new approaches would be, but I think it has to look beyond the exchanges... It has to take into account what technology "makes possible;" i.e., new policies have to take into account that decentralized exchanges will exist. - New AML - I mention Artificial Intelligence algorithms. My opinion is that while tech makes the old ways of conducting AML almost obsolete, new technology might also be the way to investigate the more serious case. If you look at money laundering from a "materiality" perspective, and just have an AI algorithm go after the big money and amounts, there might be effective strategies for identification of bad actors. Beyond my own idea about this, it's not clear to me exactly what the details would look like - i.e., who is enforcing these, which country is enforcing them, and how to pursue suspects. mvenneau 1 Link to comment Share on other sites More sharing options...
Hodor Posted September 25, 2017 Author Share Posted September 25, 2017 41 minutes ago, enrique11 said: Here's an older thread from bitcointalk where one individual compares them to one another, their pros and cons. Thanks for sharing! I knew about Waves but not the others. I was in the process of making a summary of some of the DEX's I found; I notice that his list is lacking some of the ones on my list: Bitcoin Coinffeine Ethereum EtherDelta KyberNetwork Decentrex I'd heard of Bitshares but never fully investigated it. enrique11 1 Link to comment Share on other sites More sharing options...
mvenneau Posted September 25, 2017 Share Posted September 25, 2017 Yea it seems like something that will take some time to develop let alone keep up with the evolution of crypto currently. I wonder how they handle cold wallets even? You basically just connect it when you want to transfer funds to or from your account. Or what if people just purchased multiple cold wallets, Basically each would be their own accounts right? Hodor 1 Link to comment Share on other sites More sharing options...
Hodor Posted September 25, 2017 Author Share Posted September 25, 2017 7 minutes ago, mvenneau said: Yea it seems like something that will take some time to develop let alone keep up with the evolution of crypto currently. I wonder how they handle cold wallets even? You basically just connect it when you want to transfer funds to or from your account. Or what if people just purchased multiple cold wallets, Basically each would be their own accounts right? This is one of those variables that the AI programmer would need to take into account. If it were me programming the algorithm.... Requirements: I need to identify the country of the actor (is this even possible by looking only at a crypto network?) I need to identify the flows to and from wallets on the network I need to identify flows that equate to fiat value measured at over "X" and under "Y" (with a range of materiality) I need to identify time frames (May be used to connect material flows to other cyber crimes) Historical pattern matching: I could test my AI on historical "known" flows of money laundering through a crypto network to see if my AI could flag the transaction or wallet If governments around the world were serious about using AI to purse AML violations, they could have a competition with rewards, similar to how Numerai uses its crypto-currency to reward its data scientists: https://www.wired.com/2017/02/ai-hedge-fund-created-new-currency-make-wall-street-work-like-open-source/ mvenneau 1 Link to comment Share on other sites More sharing options...
mvenneau Posted September 25, 2017 Share Posted September 25, 2017 2 minutes ago, Hodor said: This is one of those variables that the AI programmer would need to take into account. If it were me programming the algorithm.... Requirements: I need to identify the country of the actor (is this even possible by looking only at a crypto network?) I need to identify the flows to and from wallets on the network I need to identify flows that equate to fiat value measured at over "X" and under "Y" (with a range of materiality) I need to identify time frames (May be used to connect material flows to other cyber crimes) Historical pattern matching: I could test my AI on historical "known" flows of money laundering through a crypto network to see if my AI could flag the transaction or wallet If governments around the world were serious about using AI to purse AML violations, they could have a competition with rewards, similar to how Numerai uses its crypto-currency to reward its data scientists: https://www.wired.com/2017/02/ai-hedge-fund-created-new-currency-make-wall-street-work-like-open-source/ I guess these all seem like things that could be worked around, much like our current system but with the added protection. Will be interesting to see how the IRS adapts with this huge threat to their money flow lol. Atomic swaps seems to make it to where you could now purchase coins through anyone with a smart contract, all it will take is for a phone app that can run that platform. I guess there would still come an issue of getting fiat into crypto so there still may be a need for even decentralized exchanges. Who knows what other crazy tech will come up tomorrow or next week though lol. Hodor 1 Link to comment Share on other sites More sharing options...
enrique11 Posted September 25, 2017 Share Posted September 25, 2017 (edited) 40 minutes ago, Hodor said: Thanks for sharing! I knew about Waves but not the others. I was in the process of making a summary of some of the DEX's I found; I notice that his list is lacking some of the ones on my list: Bitcoin Coinffeine Ethereum EtherDelta KyberNetwork Decentrex I'd heard of Bitshares but never fully investigated it. I find it incredible that someone was on top of DEXs in early 2016 (January 24, 2016) learning about the differences back then and able to post so much about it. I didn't really learn about DEXs until fairly recently, but still, incredible that someone back then was able to post such much about them at what is from my own perspective an early developmental period for DEXs. Bitshares though has been around a long time...hard to forget that one - didn't know it was a DEX - always thought it was a platform like Ethereum. I never bothered looking into it because it's an old 'crypto' and hasn't gained as much in popularity like bitcoin and ethereum. Edited September 25, 2017 by enrique11 jjitalex and Hodor 2 Link to comment Share on other sites More sharing options...
Fenix Posted September 25, 2017 Share Posted September 25, 2017 Thank you @Hodor Hodor and pucksterpete 2 Link to comment Share on other sites More sharing options...
one_giant_leap Posted September 25, 2017 Share Posted September 25, 2017 (edited) Quote A decentralized exchange is just that – normally software that runs on somebody’s smart phone or personal computer. It may be a browser application, or it may be a desktop application – either one will do. Actually it is already done. @Hodor did you ever hear anything about Bisq? https://bisq.network/ Bisq is an open-source desktop application that allows you to buy and sell bitcoins in exchange for national currencies, or alternative crypto currencies. The system is peer-to-peer and trading can not be stopped or censored. Edited September 25, 2017 by one_giant_leap Andi10, GiddyUp, Hodor and 1 other 4 Link to comment Share on other sites More sharing options...
pucksterpete Posted September 25, 2017 Share Posted September 25, 2017 Has anyone on here ever traded with the Waves platform? Hodor 1 Link to comment Share on other sites More sharing options...
Hodor Posted September 25, 2017 Author Share Posted September 25, 2017 2 hours ago, pucksterpete said: Has anyone on here ever traded with the Waves platform? This is the one I'd heard of, but never used. Also eager to hear from real users of these platforms! Link to comment Share on other sites More sharing options...
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