Why should I launch an exchange when there are already hundreds of existing exchange?
As a entrepreneur: Exchange services is very difficult to differentiate. It’s a commodity service. Why should I invest in marketing to promote my new exchange?
As a customer: Why should I buy tokens?
- Most of existing tokens have not active project behind
- Many times the token is useless for the project and it will not increase in value if project succeed (just see ZRX token. It’s down -76% from 52wk high while your team is working actively on the project. Why investors have to buy tokens?
If you want to list the same assets as everyone else with the same interface in the same markets, then yes, it's hard to compete. However, we see a world of tokenized assets coming online that will need unique markets for exchange. Something like Radar Relay (https://radarrelay.com/ for ERC-20 commodities) is totally different from Veil (https://veil.co/ for prediction market shares) is totally different from BoxSwap (https://boxswap.io/ for trading collectibles). Even within ERC-20 commodities exchange, there are many different models of exchange within different markets that are sufficiently differentiated.
We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product. The concept of "tokens" and "exchange" will become very abstract in the near future.
Not that I have any interest in launching an exchange, but I do see what you mean by the possibility of an exchange becoming quite abstract. If housing deeds are traded then a housing marketplace is an exchange. If cars ownership is traded then a car marketplace is an exchange. If in-game items are traded, it's an exchange.
Could one think of stores as one-sided exchanges, where resale is just not natively possible? Does Google operate an ad exchange? Is iTunes an exchange? If digital goods ownership were on a blockchain then resale would be possible... What about physical goods?
95% of blockchain projects are a garbage heap, crypto currency is WAY overvalued, but the 5% of projects that are actually useful, and have a real need for a blockchain may just fundamentally change parts of how we live life
when micro transactions as a concept came to games, it changed the way people wrote games. when crowd funding became mainstream, it allowed more innovation from people with just a need and an idea
don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
*EDIT: and to be clear, i think the currency part of crypto currency is in the 95% not helpful (maybe unless you’re talking about stellar, which deals more with fiat/other currency exchange and for the most part eschews spending crypto currency itself)
> don’t dismiss the 5% useful for the 95% useless (and no, i’m not going to enumerate the useful cases because it’s been done to death)
It sounds like you can't point to any, like everyone else who insists there's a 'there' there. Nobody has been able to point to a single, legal, use case where crypto is better than a fiat based technology. Zip. None. But they're all sure it's there.
Don't you think with all the interest in the space, if someone had come up with one, it'd be enormous? EOS raised over four BILLION dollars a few years ago and still doesn't have a working blockchain. [1] You can fire up a blockchain in minutes. If there was a company that actually created something of value, it'd be worth more than the mewn y'all are trying to reach.
We've been waiting for a decade now, I'm sure OP will deliver /s.
How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs). Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
> How about real time cross border remittance and settlement? Current fiat approaches require large illiquid reserves, are slow, and not very scalable.
It's bad for that, we've been through this. To send money you have to pay ~1% to an exchange in your home country, wait a few days for it to clear exposing yourself to huge forex risk, pay a $1 transaction fee give or take, then pay ~1% to an exchange in your destination country netting you 3-5 days latency, 2% fee plus $1 plus 10 minutes and incalculable forex risk. And the risk your exchange will literally just steal your money a la Quadriga. Or getting it confiscated en route like the $825M taken from Bitfinex by various government entities for laundering money.
There are a lot of solutions to this problem ranging from a credit card to buy things, TransferWise (0.85% fee give or take) to Interactive Brokers ($20 per million fee, or 0.002%) to Norbert's Gambit (free) to a wire transfer if you have to settle instantly. Or even just opening an HSBC account in both countries and moving the money instantly online via web banking.
Then there's Square Cash and Venmo for free domestic transfers, the free/instant domestic RTP network in the US, the free/instant SEPA network in Europe and the often free/instant Interac e-Transfer network in Canada.
> ...and not very scalable.
According to the Bank for International Settlements triennial report of 2016, the foreign exchange market cap averaged $5.1 trillion per day.
That's $1,861.5 trillion dollars per year. Forgive me for thinking that means the scaling issue is pretty much solved. It's probably the single most liquid market in the history of the world.
> It’s also useful for transmitting money long distances when banks won’t do business and you want to avoid a paper trail (drugs).
I did say a legal use case. One that neither violates laws nor sanctions. Worse, Bitcoin leaves you with a paper trail. You'd have to use Zcash or Monero.
> Fiat is perfectly fine for in person transactions, but not when distance is involved. You may or may not morally agree with it, but this is a proven use case.
It is, though, because you can use your Visa card to send money instantly to anywhere in the world that isn't sanctioned.
You've done a good job explaining how to do foreign exchange and how you can personally buy things in other countries. What happens if you're an international business that uses Bank of Melborne and has to pay vendors in Croatia using Primorska Banka? How does actual money get sent? Not credit that can be settled at a later date. Real money, sometimes large amounts that needs to be settled. A forex market is absolutely going to be necessary to do this, and as you pointed out those are very liquid markets which helps. A forex is only one piece of the puzzle though. You somehow need to get money out of Bank of Melborne and into the forex market. Then you somehow need to get the money out of the forex market and into Primorska Banka.
I get it, you want to play devils advocate, but every example you gave solves a problem that isn't "real time cross border remittance and settlement". They either aren't cross border (Venmo/Square Cash), or don't actually result in settlement (TransferWise, Norbert's Gambit), or aren't realtime (Interactive Brokers takes 3 days to settle your account FWIW).
EFT transfer to an exchange, purchase crypto (1% fee), withdraw to a different exchange ($1 fee), sell crypto (1% fee), SEPA transfer to recipient.
Classic path:
TransferWise handles everything (0.85% or less). Or:
EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts. Or:
Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment. Or:
Wire money (pricey). Or:
With a brokerage account and an established business you can instantly make your payment through margin (3.9% per annum). IB will allow you to borrow Hrvatska kruna and withdraw instantly via SEPA payment. Then you can transfer in Australian dollars over EFT at your leisure.
Seriously, this is a solved problem and the crypto path is not faster, it's not safer, it's not cheaper, it's not easier.
> TransferWise handles everything (0.85% or less).
TransferWise doesn't do settlement. You still have to pay a merchant with a card who then needs to settle. No actual money is being settled through TransferWise.
> EFT transfer to Interactive Brokers, FOREX exchange ($20 per million), withdraw via SEPA to Croatian account. They allow you to link both AU and Croatian accounts.
EFT transfer to IB isn't instant. SEPA requires you to be using Euro. SEPA does handle settlement, but you still need to do settlement with both the EFT transfer as well as within your IB account. IB does have programs to allow early withdrawal before your account is settled if you quality, but again that isn't settlement.
> Open an HSBC account in both places and use the online instant account-to-account global transfer tool (rates vary, ~2%) and send a SEPA payment.
Again, SEPA requires you to be using Euro. Additionally, you would need to do settlement on the initial transfer to HSBC.
> Wire money (pricey).
The company you're using to wire money needs to handle cross border remittance and settlement, so how do they do it?
Just to reiterate... you've done a fine job explaining how a consumer can send money across the globe. You're not wrong to say that as a consumer there are perfectly acceptable solutions that can accomplish what they need. What you've completely failed to do is explain how to accomplish "cross border remittance and settlement" using Fiat in a way that is fast, doesn't require vostro account (i.e. illiquid reserves), and is scalable with the number of possible banks you'd need to transfer money to/from.
Ah I guess I misunderstood your question. My understanding is that settlement can be accomplished the way that TransferWise bootstrapped. They matched up two pairs of domestic transfers, where if I wanted to send money to Canada, they waited until someone wanted to send money to the US, then we'd each domestically transfer money to eachothers recipients. Minimal reserves, and everything happened domestically.
Visa is NOT instant. VISA transactions take up to 48 hours to clear. And in some cases the credit card processor can and will hold funds for even longer than that.
Some do, but some like Square will pay you out next business day free of charge or instantly for a small surcharge. To your point they’re floating that during settlement. It’s instant in the sense that the transaction is approved instantly and the settlement is a formality.
Settlement is not a formality. Money still has to change hands behind the scenes in various bank accounts. The only thing that's instant is the check for available funds. The actual transfer of money still occurs via ACH.
Within the US, ACH is being superseded by RTP realtime payments. SEPA is realtime in Europe. It's a formality from the perspective of the customer because the payment 'happens' immediately, and the merchant gets paid out within 24 hours, sooner if they really need it. Is this really a problem?
But still, definitely a promising improvement over ACH.
It is a practical problem that the merchant has to wait 24-48 hrs for funds. It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services. For example, a made-to-order business has to wait for funds to clear from a customer (or front the capital) before they can turn around and order goods to produce the product a customer is purchasing. Which slows down delivery. And that effect is amplified across the whole supply chain.
> It's a cash flow problem. It slows down the speed at which that cash can be used to purchase other goods or services.
No. That's what lending is for. Square will allow you to cash out instantly for a 1% fee, they offer merchants a debit card they can use to access the funds in real-time as they're received for no additional fee, or you borrow some amount of float at today's incredibly low interest rates.
As a business in need of liquidity you can even sell your accounts receivable for less than 1% to invoice factoring companies. There's so many options out there.
Or the merchant can open a credit card and get fee-free interest-free loans for a whole month.
This is not an issue today, or rather, you’re making mountains out of molehills. There are ways of addressing this without crypto or throwing out the existing financial system. But more importantly what how many merchants wait for funds to clear before they go out and buy the supplies to do a job?
We get it- Hacker News is rabidly, irrationally anti-cryptocurrency. Which is ridiculous, considering most people here 1) Create or participate in online spaces and 2) Wish to monetize their services in ways that don’t necessarily involve advertising. You don’t think peer-to-peer micro transactions are going to transform your work in a fundamental way? Then I’m sorry, but you lack imagination.
No, I don’t think micro transactions have a future - peer to peer or otherwise - but not for any technical reasons. Humans suffer from decision fatigue [1] wherein making decisions just wears you out and you don’t want to do it regardless of size. A decision requires a costly, difficult evaluation of worth regardless. That’s why even though buying shows one at a time on iTunes would likely save you money, you pay for Netflix - because you don’t want to decide to pay. Micropayments aren’t a limitation of the existing financial system, it’s just accounting. This is a limitation of human physiology. We could have it right now if people wanted it but they just... don’t.
AWS became successful party because of the "micropayments for servers" style hourly model.
Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
Flattr isn't micropayments. You as a reader pay a decidedly non-micro amount into a pool monthly that's then divided between flattr sites based on apportioned viewership on a monthly basis. This is the Netflix model, and exactly what I suggested. This is accounting, not micropayments. Neither the viewer nor the content creators ever transact sub-penny amounts, they only exist in the context of calculation and apportionment. And they do this specifically because people don't want to make individual purchasing decisions.
> AWS became successful party because of the "micropayments for servers" style hourly model.
Again, that's accounting, or more accurately, metered billing. A low price for services is not micropayments either.
> Micropayments are most certainly a limitation of the current financial system: Pulling together all the disparate banks of the world to cooperate to create a global API to facilitate payment for <$1 amounts? Don't assume that all problems are technical: This would be near impossible, where cryptocurrencies are doing this right now.
If this were something people wanted, you'd load up a, for instance, PayPal account and drain it pennies at a time. Once an aggregate payout to a specific merchant exceeded the transactable threshold it would execute automatically. This can be done today. People just don't want it.
And it only works like that because of the current financial system. Flattr exists because of the lack of a solution in the current financial system: Cryptocurrency (eg ETH with Web3) would allow sites to build a Flattr-like system without the middleman, and cut down on the overhead of actually building a company around it.
People don't want that. You're describing a solution in search of a problem. We have the technology to execute on this right now but nobody does, because people don't want it. If they wanted it, we'd have it, and we'd be iterating in the problem domain not the solution domain. There's no pent up demand for a world in which you're constantly forced to make tons of individual purchasing decisions.
More importantly though, people have learned not to value content. This is a huge problem for the media industry. Nobody wants to pay anything at all for what they create, they want to pay with their time and attention - through ads.
> when micro transactions as a concept came to games, it changed the way people wrote games
Has there ever actually been a case where microtransactions made for a better game? Everything I've read about what it's like working for studios that rely on them is creepy stories about trying to chase 'whales'.
If think in some games where cosmetics are the only commodity it works well. In-game customization frankly was not a priority for game-devs, as it did not turn a profit. That is until games like League of Legends et al made customization micro-transactions their entire business model. It's meant newly fantastic support for the art departments! It's also lead to a number of games that are constantly updated over many years instead of just made for release, so one can play their favourite games without them become stale. Yes, this has existed in the form of a subscription service before, but cosmetic micro-transactions have effectively socialised some games, where the whales pay for game development and less wealthy individuals still get to enjoy the game without paying anything! Path of Exile probably wouldn't exist without micro transactions, at least to the popularity it has become, and I've never had to pay a penny to play that game.
So there are a few cases. That's not to say that most mobile game micro-transaction models aren't absolute hot, filthy, dirty, disgusting, stinking garbage.
I wouldn't say "better"; That's pretty damn hard to substantiate! What's the other option? Well 1 is that the game wouldn't exist. I guarantee that Popcap [1] wouldn't be too happy, and there are plenty of people that get enjoyment from their games (arguably sometimes to an unhealthy degree). If micropayments weren't a thing, then many of their games would likely not exist.
I don’t see what is the point of this comment other than “hurr durr blockchain bad”. Providing a marketplace tokenised assets/digital assets is useful.
In what way is it useful? You say that like it's obvious, but it's not. It's on the challenger to explain why it's better than the status quo, not the other way around.
Because there is no status quo? (And solutions that aren’t better than status quo should be automatically thrown in the trash?). Now if your question is why are markets useful, then that is obvious is it not?
Secondly, I find this viewpoint highly regressive, the asking of why is X useful question. We can go to the moon but why is it useful? These type of questions are ultimately backwards and short sighted. Why do we spend X to research Y and why is Y useful is not clear until $many_years. It may not be obvious to you if it is useful or not but it is not up to you to decide (the invisible hand of the market decides).
From your other comments, it is clear that you have already decided that “all cryptocurrency are scams” so I don’t think you are arguing this point in good faith.
> Because there is no status quo? (And solutions that aren’t better than status quo should be automatically thrown in the trash?).
I think in general, people are excited by technology that's innovative and promising. It doesn't have to solve problems better or more efficiently today but it should have some clear path to doing so, yeah.
> Now if your question is why are markets useful, then that is obvious is it not?
I guess what I'm asking is why are markets for crypto tokens useful? If I built great tech around markets but it only let you exchange week old chicken nuggets would that be valuable?
> From your other comments, it is clear that you have already decided that “all cryptocurrency are scams” so I don’t think you are arguing this point in good faith.
Substitute 'cryptocurrency' for 'entries in a MySQL store' and re-read everything that's been posted here.
Going to the moon yielded amazing technological advances, in engineering, in materials science, in physics, chemistry, national identity, etc and promises to do so again as we iterate. Capital and research expenditure isn't negative sum. Then who knows what we might find out there?
Crypto is not new technology in any way. It's a 10-year-old recombination of 20-year-old tooling. Merkle trees and hashcash. That's it. All the money being spent on it is paying miners in China to repeatedly hash numbers and pay their electric bills. There's no research, no innovation. Just people selling each other spreadsheet cells they're sure are going to be worth something one day because 'blockchain'. It's religious, not scientific. Combine that with the world of finance, zero regulation and irreversibility, there's no way to make it anything other than a scammer's paradise. Scamming people is a feature, not a bug. All based on what, the idea that 'inflation is theft' and 'the gubmint shouldn't tell me who to send money to'? Any ECON-101 class will set you straight.
It's actively anti-efficient, regressive in terms of user experience and negative-sum: the more the price goes up the more you have to pay miners, the more cash needs to come into the system to keep the price stable. PoW isn't decentralized (>51% of BTC hashpower is concentrated in a few mining pools in the PRC), it's not trustless (PRC), it's not fast (7tx/sec), it's not cheap, it's not a good store of value and it fails to solve human problems (deflationary in the face of an expanding population and economy).
It's abjectly failed at every one of it's stated goals, all that's left is 'number go up.' What's to like?
If crypto was a fad it would have died long ago. Yet here we are still talking about it with more money and development behind it than ever before. I really encourage you to read this newspaper column from 1995 predicting the end of the internet because just as you have put it, there are already way better options out there. https://thenextweb.com/shareables/2010/02/27/newsweek-1995-b...
> If crypto was a fad it would have died long ago.
That's appeal to authority. Let's focus on what it does and doesn't do, and how well. The internet wasn't built to literally become less efficient the more data was transferred over it, right?
Why are we judging it on it's capabilities of today? Scaling is a problem actively being worked on. Again, your comment draws a parallel to the aforementioned article. There are certainly problems, but some of us see the potential for a true digital cash and people will continue to work on it one way or another until it's achieved.
It was built on the crudest app tech stack vis a vis HTML, CSS and (not even sure JS was a thing yet in 1995) JS. Not many could predict the cloud becoming a multi trillion dollar industry in 1995.
> It's a 10-year-old recombination of 20-year-old tooling. Merkle trees and hashcash. That's it.
This is an unfair characterization. Every technology can be described as a recombination of what existed before. Bitcoin solved the distributed consensus problem in a completely new way. This was a long open problem.
> There's no research, no innovation.
There's a ton of blockchain motivated research going on in signature schemes, distributed consensus, formal verification, zero knowledge proofs, verifiable delay functions, game theory, governance, economics, etc.
I don’t see why crypto skeptics feel the need to regurgitate the same tried and debunked talking points into every single thread about crypto. This unhinged rant might as well be a copypasta at this point. None of this thread is even about bitcoin.
You bring up an interesting point in that I can’t think of another technology out there quite as polarizing as crypto. It’s almost fanatical devotion from both sides. I disagree that the points are debunked, I think the current thinking from the pro side is that those are “today’s problems” and the future will be different. I think the anti camp like myself are frustrated by the religious devotion to something that in our opinion represents regression from the status quo as a north-star, driven in part by uninformed debaters assuring us crypto will solve problems they themselves don’t understand. I think it’s like how my dad used to hate medical shows because they were to him a parody of his profession but to the less informed of us, just kinda fun and cool.
I know bitcoin isn’t the only crypto, I also know proof of work isn’t the only algorithm out there. Bitcoin is the best known and most successful, and proof of work is the only algorithm so far proven to work as specified. I was giving more credibility to the space than I usually do with those simplifications, if I wanted to make fun I’d call on our boys Tether (a fraud [1] run by a fraud who tried to start a Ponzi scheme [2] and whose connection to Bitfinex eventually got revealed in the Paradise papers [3] - in which most crypto prices are denominated), IOTA (it’s ternary for no reason, isn’t decentralized, and tried to write their own hashing algorithm and when that failed they called it a DRM scheme [4]) and Dentacoin (your dental records on the blockchain for no discernible reason [5]). Even a team trying to start a BTC ETF concedes 95% of all volume is fraudulent [6]. That’s a bad place to start no matter how you slice it.
Apologies for offending you, though, that wasn’t the intent.
Look at numeraire, nothing on the internet could achieve what numeraire has done, it puts skin in the game for financial predictions. The guys there were able to run a hedge fund out of it.
If we go to computing primitive. The internet was formed to distribute information, not sensitive information.
There is no protocol on the internet to store, share and process sensitive information like identity data, financial data or digital assets.
An analogy to this absurdity is that in the real world, people distribute newspapers on bicycles and trucks whereas money/ gold is moved around in armoured trucks with gunmen.
The internet doesn’t have a protocol that acts like the armoured truck with gunmen, bitcoin was potentially the first one to do so.
Is a speculative asset like bitcoin a gamechanger, I don’t think so, but I do think there’s value in adding native layers on the internet that enable the exchange of sensitive information.
I don’t think it is possible to offend me with your posts (for the record I didn’t read it, I am sorry if you spent any time writing it). Maybe you should start a blog or something instead of ranting about something entirely offtopic and trying to derail the thread.
> We think of 0x more like Stripe: an under-the-hood technology that allows entrepreneurs to move more quickly and easily add exchange to their product.
One’s velocity should always be slightly less than their SEC defense attorney. If you're legit, take the time to make sure your paperwork is legit.
Launch Kit is not an ICO or promoter, it's a platform for crypto exchanges. Could you elaborate why you're referring to a comment detailing the SEC going after ICO scams?
I'll give you my answer because I have a project which could have used this.
I created a dapp that allows people to do [stuff] which generate some erc-20 token for users. They can then use this token to access special features on the dapp.
It's easy to let users send and receive the tokens they have. But I want the token to have a value outside the dapp itself.
Unfortunately I cannot get this token accepted on coinbase and other exchanges. Just because it is not important enough.
I still want people to be able to sell or buy these tokens. The next best idea is to create a small exchange platform on my dapp: let people trade the token for ether or for other tokens. It's time consuming to code so I gave up.
Now this is where this thing would have been great.
> Exchange services is very difficult to differentiate.
Because financial markets are very globally fragmented. The hardest part about opening an exchange is banking, clearance and KYC/AML. For example the chance that a citizen of say Benin or Uzbekistan could open safely and easily open an account at one of the major crypto exchanges is essentially zero.
There's a lot of parts of the world where there's a captive audience with high demand for crypto trading, but no decent service available. There are pre-existing traditional brokerages and forex shops that have the local banking and KYC/AML infrastructure place, but don't have the tech for the exchange itself.
Think more broadly about what an "exchange" could be. You're thinking crypto forex, but consider a crypto-kitty bidding platform or a virtual game item marketplace.
Or market for insurance policies. Or bonds. Or stocks. Regulation is clearing up and there are many biting at the bit for this. The disruption of financial markets may not happen tomorrow, but once it does it will go fast in each market. If there are more efficient venues, competitive market participants will start moving once they realize that they will be at a competitive disadvantage if they don't. When I say efficiency, I am not talking in technical terms and not necessarily on the kind of environments we see on public permissionless chains. So let's keep transaction finality and computational efficiency out of scope for a moment.
Think of chains as subnets on the internet. The gaps will be bridged to allow seamless transfers between them.
I've been wrong before but to me this is bound to happen. How many businesses in competitive areas have fax as a preferred method of communication today?
Don't take what I'm saying as an argument in favor of buying ZRX tokens. I do think it's a cool project, albeit IMO could have done better without the utility token as an inherent component. But that's more about the business model than the tech. It will probably be another boom and bust before we see the leading protocols emerging.
> Regulation is clearing up and there are many biting at the bit for this.
In what way is regulation actively harming your ability to purchase shares of a legitimate operating business without overextending yourself financially? Please be specific.
The ability to compensate someone who is creating value in a network with ownership of said network (eg giving an early uber driver, or Airbnb host, options or equity.) this is currently not possible to do in the US, but is possible with crypto networks.
If you're willing to trust the entity holding your assets, then a database will suffice. The non-custodial features of 0x enable exchange without reliance on third parties.
Yea I mean, if we're going to go down the hole of "cryptokitties" and other asset exchange, let's be honest, we're reliant on a third party to create the value in the first place already.
judging a cryptocurrency projects usefulness on cryptokitties is like judging a front end frameworks usefulness on “TODO MVP”: it’s just the example of a tradable asset that everyone uses BECAUSE it has no value and anyone can just set it up to test.
substitute crypto kitties with something more real, like say a government starts to issue ownership information for cars (pink slips in the US i think? idk exactly) on the blockchain... there’s live, traceable ownership information, duties can be calculated and applied automatically, and traded on a platform like this. this is an asset that has real value because it exists in the real world; it’s not the bit of paper that has value, it’s the significance that it constitutes ownership of an asset
*EDIT: and i’m not saying that this idea has value either; it was just an example of something with intrinsic value rather than “third party created value”
> judging a cryptocurrency projects usefulness on cryptokitties is like judging a front end frameworks usefulness on “TODO MVP”
If you sold one of your TODO notes for $170,000 [1] frankly I think that'd be a fair judgement to make.
> substitute crypto kitties with something more real, like say a government starts to issue ownership information for cars (pink slips in the US i think? idk exactly) on the blockchain... there’s live, traceable ownership information, duties can be calculated and applied automatically, and traded on a platform like this. this is an asset that has real value because it exists in the real world; it’s not the bit of paper that has value, it’s the significance that it constitutes ownership of an asset
You know you can do that with a database right? Literally, a database. Like we have today. That's how it works today. You're trying to introduce complexity and inefficiency into the US government. It's like trying to sell ice blocks in the arctic, but somehow dramatically less efficient.
I already trust the government to allow me to drive my car. Why on earth does this need to be decentralized? It's the definition of centralized. A vehicle registration reflects the governments acknowledgement that you own that vehicle and are allowed to drive it at the governments discretion. If they revoke it your blockchain entry will be totally worthless and just out of sync with reality. The value is created by the government.
> If you sold one of your TODO notes for $170,000 frankly I think that'd be a fair judgement to make.
Other than the fact that people spend stupid money on stupid things [1], I'm not sure what your point is
> You know you can do that with a database right? Literally, a database
Yes, and this is a generic solution that applies to any kind of asset, and then software like 0x can plug in to trade said assets. Generic cases are always more complex than specific cases
> trying to introduce complexity and inefficiency into the US government
Well actually I'm trying to do nothing of the sort: As I said, it was an example of asset trading of something with intrinsic value, and not a valid use-case
> I already trust the government to allow me to drive my car. Why on earth does this need to be decentralized?
It has nothing to do with trusting the government, or driving a car. It has to do with transferring ownership information of an asset with intrinsic value between 2 parties, ensuring payment without relying on (possibly expensive) escrow
You seem to be conflating a number of examples that I made to explain specific points to be a proposition of things that should actually be done
> It has nothing to do with trusting the government, or driving a car. It has to do with transferring ownership information of an asset with intrinsic value between 2 parties, ensuring payment without relying on (possibly expensive) escrow
The government is the entity that recognizes the change of ownership, it's not something you can do without their approval. Your change of ownership is being filed with the government and is available at their discretion - they can choose to block it. Car registration isn't for your benefit. If you require the government's approval you may as well store it in their database. I just saved you a blockchain :)
And yet again you've missed the point... So I don't understand how the ownership and transfer of ownership of vehicles works in the US (where, BTW, I do not live, and have no need to understand).
Let me say it again so it's really obvious:
It has to do with transferring ownership information of an asset with intrinsic value.
Stop arguing the specifics of the admittedly flawed example that I came up with between starting to type, and ending typing the sentence.
I respect that may have been a poor example, but I think you’re missing my point, which is that the information on the blockchain isn’t relevant if it’s not in sync with state off the blockchain, doubly so when not backed by law.
Ok your car is registered on the blockchain and you fail to pay your bills. Now it belongs to your lender. Well, the blockchain says one thing but the lenders tow truck says another. So what good is it? Blockchain technology does not address this critical component which is the faith that reality reflects the consensus on chain.
The reason the only thing that has any traction at all is cryptocurrency is that the entire concept is encapsulated on chain. The second the chain becomes a record of the real world it falls over because the world won’t change to reflect the blockchain and the blockchain won’t change to reflect the world. Only cryptocurrencies have intrinsic value captured on chain, and I am being generous when I say value.
The reliance on the severely distorted plutocratic ownership of 0x, Ethereum, and most of the cryptocoin supplies is a huge risk factor that is often conveniently swept under the rug.
By building on 0x, or other cryptocoin software it's essential to be aware of the elephants/whales in the "economy" of cryptocoins and tokens.
Yeah that was brutal; the definition of oh, you lost a few thousand dollars? That sucks ETH transactions are irreversible. Now I lost a few hundred million so all of a sudden it’s reversible, no harm no foul -- and most importantly, no lessons were learned that day.
Answering why is up to you, the builder; differentiation is key to why 0x has created this protocol.
"Tokens" can be a special kind of object which can be "exchanged" for other kinds of objects. It is not always about purchasing or swapping; this interaction can solve many different kinds of coordination problems.
The exchange can create a context around users interacting via various types of tokens, enabling new kinds of services and communities to form. This could lead to enormous value for users.
In what way? I think that was the parent poster's question. I think it's fair if we're going to be making huge broad-strokes claims we should at least attempt to justify them.
The properties of the general medium and of exchanges themselves would provide value if built upon. At the core of of the value proposition is the value derived from more efficient human coordination.
- Giving certainty about the properties of the token asset to the user. Whether trading the exchange or in use at a service which accepts the token, the user verify what the token actually does. And what might change! Reduces risk of policy-change by owners and managers of services.
- Giving control of the token asset to the users, or at least a verifiable level of control. Reduces risk of interference.
- Securing the token asset, protecting the asset and related data. Reduces risk of loss.
- Enabling easy integration or migration to other smart contract systems, due to token standards like ERC-20 and ERC-721. Reduces risk of vendor lock-in. Powers beneficial second-order effects.
- Enabling composability. With primitives like various kinds of tokens and "exchange" addressed and standardized, new layers can be built, new configurations found. Creates value by reducing steps for users as they engage with each other within token-based smart-contract systems.
Different jurisdictions have different compliance requirements. Not sure, but my guess is the goal of this project is to allow regulatory arbitrage with a single unified interface.
Capabilities to enforce regulatory compliance on permissionless chains is coming. You could, say, have zero-knowledge proofs in smart contracts that enforce that tokens representing security X can only be transferred if the receiving account has performed KYC and confirmed as an accredited investor in jurisdiction X, Y or Z, without leaking any PIIs that went Intl the verification.
Not to say you're completely wrong, just that smart contracts can be used to enforce regulation rather than skirt it - like any tool the outcome depends on the intentions of the one wielding it. :)
I sincerely hope permissionless solutions make such permissioned solutions obsolete. There are people, who by accident of their place of birth, are not permitted to use permissioned financial systems.
Yes. What many of the well-intentioned people (many with libertarian/cypherpunk/anarchist ideals) in the blockchain space are building now might become enablers of the perfect control system.
Zero-knowledge proofs or RingCTs? Great, require disclosure and reporting of proofs or view keys to the man, who will enforce it for all interacting parties.
"You can't enforce bans on running nodes"? Well, start enforcing strict control of the public IP space so everyone address has a responsible individual behind it and put severe penalties on unlicensed crypto/privacy enabled assets/what have you.
I am thinking more and more we need to seriously consider moving the web to something like I2P or Freenet before it's too late.
As a customer I want an exchange so that the tokens I buy have some liquidity, at least in theory. You're not going to be listed on an exchange initially and those exchanges that do list smaller tokens tend to be sketchy.
As an entrepreneur, you figure out how your use-case benefits from tokens. For example, let's say you provide a product/service. You can sell tokens that can be redeemed for the product/service to investors at a "wholesale price".
There's no need for tokens to go "to the moon", just to serve as a medium of exchange and ideally provide some margin to you and/or your investors. You could also offer a company ownership structure for tokens, but now you're in securities regulation territory, which nobody wants to deal with right now, at least at the moment.
Of course a lot of crypto projects are garbage, just like most businesses fail and wipe out investor money in the process. The hype surrounding crypto certainly has massively underpriced risk, but the same could be said about stock like Tesla, Lyft or Uber.
>> Why should I launch an exchange when there are already hundreds of existing exchange?
Maybe you have the on-off ramps sorted out, a friendly bank and a regulatory environment, licenses, legitimate AML/KYC measures and can do it properly?
While there are many exchanges already, how many can say they're that above board?
The market has ridiculous demand really, at times. But it highly depends on timing, location etc. And also resilience. If you run the exchange for long enough time, you will collect customers who will be coming back.
There's actually several use cases here that are worth noting. As technology improves, more and more centralized crypto exchanges (where the majority of trading volume currently lies) are creating decentralized counterparts - yielding lower custodial risk among other benefits. Also, newer blockchains that don't have DEX's yet are completely untapped markets for developers. Lastly, there are a variety of different use cases beyond just an exchange that benefit from basic exchange templates: prediction markets, decentralized lending, etc.
In a worldview where communities, orgs, products, countries, states, provinces etc. all have their own tokens, there will be need for niche, localized exchanges and 0x makes a lllot of sense.
You can't with 0x, at least not in the way you could at say Bitfinex or Binance. All of the assets remain in your personal Ethereum wallet until a trade is matched up.
That's the genius of the 0x protocol. The Relayers that LaunchKit lets you create are effectively just order books or other matching-engines that exist as a website or other service. They expose completed trades to the 0x smart contract, which atomically swaps the tokens of the trade. (Official 0x people can correct me here, I've done just a bit of research.) At no point does any organization other than you actually have control of your funds, nor can they receive them without giving you equivalent funds under the terms of the trade.
I've said before that the real use-cases for blockchains will be in doing stuff that nobody in their right mind would want to do because it's currently foolhardy. This is a good example. Giving money to a fly-by-night exchange is foolhardy - unless you don't have to give money to them. And that's what 0x enables: tradable assets without trust.
If that’d happened 10 years ago, I think they’d have come out feeling pretty good. Nobody uses blockchain for anything of value except speculation and scamming each other today. Maybe this decade will be different but I’m betting it won’t.
Indeed. I bet MySQL will have a bigger impact on society over the next 10 years than crypto will. If anyone wants to take this bet, I suggest stakes lower than the ones John McAffee chose -- he may be one set of genitals short by the end of next year.
As a entrepreneur: Exchange services is very difficult to differentiate. It’s a commodity service. Why should I invest in marketing to promote my new exchange?
As a customer: Why should I buy tokens? - Most of existing tokens have not active project behind - Many times the token is useless for the project and it will not increase in value if project succeed (just see ZRX token. It’s down -76% from 52wk high while your team is working actively on the project. Why investors have to buy tokens?