Proposed change to order fee mechanism

So there’s a problem with the decentralised exchange: miners don’t have to pay BTC fees to troll the BTC/X order books, because they can, if they’re careful, collect the fees themselves. If I’m not mistaken, it works out that a miner with 10% of the network’s hash power can troll the order book every 100 blocks, for 10 blocks (the time allotted for BTCpays), after which it returns to normal. Consequently, I think it would be best if those fees were replaced entirely with escrowed XCP, as proposed by gacrux. Because any orders selling XCP for BTC without a required XCP escrow will get quickly trolled for a significant fraction of their existences, I don’t see the point of keeping the BTC fee system around at all. The only disadvantage to this new system that I can see, is that you’d have to own (but not pay!) some XCP in order to buy XCP with BTC on the DEx.

See here for some discussion of how the new system would work. Though, again, I’d like only to use XCP escrow, and remove the BTC fees completely (of course in a backwards-compatible fashion).

I agree with the proposal, However was thinking whether the pre-requirement of XCP in escrow could potentially create chicken and egg problem so to speak, where a user would first have to acquire XCP in ‘centralised’ fashion to use the actual decentralised of the exchange and whether this could do more harm than good to the uptake, not just short term uptake but long term. you want somebody who is only involved in BTC to be able to make a trade for X on exchange without jumping through hoops, otherwise why wouldn’t they just log on to centralised exchange as usual?

Right now, there is relatively small amount of users who are using DEX, but as a web wallet appears or other server-trusted client appears. I would expect more to be interested in buying.


edit: by the way, 10% is a lot these days, in order of multiple PH. would such powerful groups really have incentive to divert their attention to collecting fees so they can troll orderbook for free?

I also think it creates too much of a nasty chicken and egg problem. Furthermore, it distances the XCP ecosystem from the BTC ecosystem, which I feel is a step backwards. If you can’t buy XCP directly with BTC, then the fact that Counterparty sits on top of BTC doesn’t matter anymore. If you can’t use a decentralized exchange and order XCP for BTC, what is the point of this? Counterparty might as well be based on Primecoin or Litecoin at that point. At that point, BTC is just a vacuous talking point. Makes it too much like Ethereum.

Is there any way to deal with troll orders at a higher level? Can a user interface like blockscan.com detect troll orders and de-prioritize them? Maybe there is some other market-based solution?

As Mastercoin and Ethereum and NXT come out with DEXs of their own, I expect the competition to get heated. I expect certain competitors to take low-life actions to undermine Counterparty even if it costs them their BTC and dignity. That said I think it would be a major blunder to sacrifice XCP’s roots within the BTC ecosystem just to eradicate troll orders. There has to be a better way that doesn’t sacrifice the core relationship between bitcoin and counterparty.

I’m all for removing btc fee as it’s confusing. New users are likely to buy their first Xcp on centralized exchanges, and they don’t need a lot to start buying Xcp from Dex. We should push Xcp on more exchanges to increase user base.


Yeah block scan or ui should have an option to filter out troll order.

[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]
I’m all for removing btc fee as it’s confusing. New users are likely to buy their first Xcp on centralized exchanges, and they don’t need a lot to start buying Xcp from Dex. We should push Xcp on more exchanges to increase user base.

[/quote]

+1

[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]Yeah block scan or ui should have an option to filter out troll order.[/quote]

Exactly. This sounds like by far the easiest way to fix this.

[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]
I’m all for removing btc fee as it’s confusing. New users are likely to buy their first Xcp on centralized exchanges, and they don’t need a lot to start buying Xcp from Dex. We should push Xcp on more exchanges to increase user base.[/quote]

The core promise of Counterparty is to obsolete centralized exchanges! It will be really really hard to convince centralized exchanges to list it, especially since the legal ramifications will be extreme. The only centralized exchanges that will list XCP will be BTC-E and Poloniex and other second-rate or anonymous exchanges.

It shouldn’t be necessary to use a centralized exchange to buy XCP. People everywhere will say WTF! What is even the point of this being based on Bitcoin if I can’t use Bitcoin to buy it on the DEX?

Wuen Counterwallet is released, it will be easy for anyone to buy XCP with BTC.

That is the real promise here.

A move to eliminate direct BTC-XCP purchases is a HORRIBLE mistake, and a HUGE damper on the market potential of Counterparty!

Can’t blockscan or other front-ends for the dex do something to de-prioritize troll orders? Surely there’s a better way here that doesn’t turn XCP into Ethereum.

[quote author=kdrop20 link=topic=132.msg839#msg839 date=1393267071]
[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]
I’m all for removing btc fee as it’s confusing. New users are likely to buy their first Xcp on centralized exchanges, and they don’t need a lot to start buying Xcp from Dex. We should push Xcp on more exchanges to increase user base.

[/quote]

+1
[/quote]


+1

[quote author=PhantomPhreak link=topic=132.msg830#msg830 date=1393257375]
So there’s a problem with the decentralised exchange: miners don’t have to pay BTC fees to troll the BTC/X order books, because they can, if they’re careful, collect the fees themselves. If I’m not mistaken, it works out that a miner with 10% of the network’s hash power can troll the order book every 100 blocks, for 10 blocks (the time allotted for BTCpays), after which it returns to normal. Consequently, I think it would be best if those fees were replaced entirely with escrowed XCP, as proposed by gacrux. Because any orders selling XCP for BTC without a required XCP escrow will get quickly trolled for a significant fraction of their existences, I don’t see the point of keeping the BTC fee system around at all. The only disadvantage to this new system that I can see, is that you’d have to own (but not pay!) some XCP in order to buy XCP with BTC on the DEx.

See here for some discussion of how the new system would work. Though, again, I’d like only to use XCP escrow, and remove the BTC fees completely (of course in a backwards-compatible fashion).
[/quote]
Hi, just registered to give out my idea.
For the user doesn’t have any XCP to make their first purchase, could we provide alternative method that require him to burn small amount of BTC instead of escrowing with XCP.  So there is two options to list XCP purchase order,
1. escrowed with XCP.
2. send small about of BTC( fixed or proportional to order) to XCP burning address.
It’s not economic to use option 2. It’s only when you don’t have any XCP at the beginning.

[quote author=ironboy link=topic=132.msg843#msg843 date=1393275195]
[quote author=PhantomPhreak link=topic=132.msg830#msg830 date=1393257375]
So there’s a problem with the decentralised exchange: miners don’t have to pay BTC fees to troll the BTC/X order books, because they can, if they’re careful, collect the fees themselves. If I’m not mistaken, it works out that a miner with 10% of the network’s hash power can troll the order book every 100 blocks, for 10 blocks (the time allotted for BTCpays), after which it returns to normal. Consequently, I think it would be best if those fees were replaced entirely with escrowed XCP, as proposed by gacrux. Because any orders selling XCP for BTC without a required XCP escrow will get quickly trolled for a significant fraction of their existences, I don’t see the point of keeping the BTC fee system around at all. The only disadvantage to this new system that I can see, is that you’d have to own (but not pay!) some XCP in order to buy XCP with BTC on the DEx.

See here for some discussion of how the new system would work. Though, again, I’d like only to use XCP escrow, and remove the BTC fees completely (of course in a backwards-compatible fashion).
[/quote]
Hi, just registered to give out my idea.
For the user doesn’t have any XCP to make their first purchase, could we provide alternative method that require him to burn small amount of BTC instead of escrowing with XCP.  So there is two options to list XCP purchase order,
1. escrowed with XCP.
2. send small about of BTC( fixed or proportional to order) to XCP burning address.
It’s not economic to use option 2. It’s only when you don’t have any XCP at the beginning.
[/quote]
+1
I think proof of burn is such a brilliant thing it should not only be used to initiate XCP, but exactly as an easy to use entry point for new users

[quote author=Polo link=topic=132.msg840#msg840 date=1393270373]
It shouldn’t be necessary to use a centralized exchange to buy XCP. People everywhere will say WTF! What is even the point of this being based on Bitcoin if I can’t use Bitcoin to buy it on the DEX?

Wuen Counterwallet is released, it will be easy for anyone to buy XCP with BTC.

That is the real promise here.

A move to eliminate direct BTC-XCP purchases is a HORRIBLE mistake, and a HUGE damper on the market potential of Counterparty![/quote]


+1


Just throwing an idea: (somehow this feels like having a horrible end result, but here goes nothing…) Maybe some kind of proof-of-burn approach could work for buying “a ticket” to make direct BTC-XCP trade, at least if the user doesn’t have XCP to use for escrow?  :o

[quote author=sulate link=topic=132.msg845#msg845 date=1393275937]
[quote author=Polo link=topic=132.msg840#msg840 date=1393270373]
It shouldn’t be necessary to use a centralized exchange to buy XCP. People everywhere will say WTF! What is even the point of this being based on Bitcoin if I can’t use Bitcoin to buy it on the DEX?

Wuen Counterwallet is released, it will be easy for anyone to buy XCP with BTC.

That is the real promise here.

A move to eliminate direct BTC-XCP purchases is a HORRIBLE mistake, and a HUGE damper on the market potential of Counterparty![/quote]


+1


Just throwing an idea: (somehow this feels like having a horrible end result, but here goes nothing…) Maybe some kind of proof-of-burn approach could work for buying “a ticket” to make direct BTC-XCP trade, at least if the user doesn’t have XCP to use for escrow?  :o
[/quote]

That’s technically possible, but would require the creation of unspent transaction outputs indefinitely, which would bloat the blockchain and draw a fair amount of ire.

[quote author=ginko-B link=topic=132.msg842#msg842 date=1393272060]
[quote author=Polo link=topic=132.msg840#msg840 date=1393270373]
[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]Yeah block scan or ui should have an option to filter out troll order.[/quote]

Exactly. This sounds like by far the easiest way to fix this.

[quote author=romerun link=topic=132.msg837#msg837 date=1393264067]
I’m all for removing btc fee as it’s confusing. New users are likely to buy their first Xcp on centralized exchanges, and they don’t need a lot to start buying Xcp from Dex. We should push Xcp on more exchanges to increase user base.[/quote]

The core promise of Counterparty is to obsolete centralized exchanges! It will be really really hard to convince centralized exchanges to list it, especially since the legal ramifications will be extreme. The only centralized exchanges that will list XCP will be BTC-E and Poloniex and other second-rate or anonymous exchanges.


[/quote]


Fair point.


[quote]

It shouldn’t be necessary to use a centralized exchange to buy XCP. People everywhere will say WTF! What is even the point of this being based on Bitcoin if I can’t use Bitcoin to buy it on the DEX?

When Counterwallet is released, it will be easy for anyone to buy XCP with BTC.

That is the real promise here.

A move to eliminate direct BTC-XCP purchases is a HORRIBLE mistake, and a HUGE damper on the market potential of Counterparty!


[/quote]


I’m not sure this is what PhantomPhreak is proposing.  Can you please clarify your proposal wrt. this point PhantomPhreak?


[quote]

Can’t blockscan or other front-ends for the dex do something to de-prioritize troll orders? Surely there’s a better way here that doesn’t turn XCP into Ethereum.
[/quote]
[/quote]

First of all, how would you identify the troll orders ? There’s no good way of doing so, as the identification must be done at the protocol level.

[quote author=Polo link=topic=132.msg840#msg840 date=1393270373]
The core promise of Counterparty is to obsolete centralized exchanges! It will be really really hard to convince centralized exchanges to list it, especially since the legal ramifications will be extreme. The only centralized exchanges that will list XCP will be BTC-E and Poloniex and other second-rate or anonymous exchanges.
[/quote]

Centralised exchanges have their place. For instance, in the long run, they will always be cheaper and faster than any distributed exchange.

Centralized exchanges will always have their place, that’s true. But if I have to use a centralized exchange to buy XCP before I can actually use Counterparty, I might as well be buying Ethereum. And Counterparty has no reason for being based on Bitcoin at that point.

Shouldn’t BTC holders be able to download Counterwallet, buy XCP, and then be off to the races?

I want to be able to buy coins from Coinbase, send them to an offline wallet, and then be ONE step at most away from signing up for a P2P stock market.
If that isn’t possible, I think you have a BIG problem. Your platform is suddenly no better than Ethereum and they will EAT YOU ALIVE on social media. You want to work directly with Bitcoin, at all costs.

Keeping BTC-XCP trades routes around all kinds of regulations. This is the easiest and fastest possible path for market adoption of Counterparty, AINEC.

Is it possible for Counterparty to match multiple orders? Any way for troll orders to compete against real orders?

[quote author=Polo link=topic=132.msg849#msg849 date=1393277885]
Centralized exchanges will always have their place, that’s true. But if I have to use a centralized exchange to buy XCP before I can actually use Counterparty, I might as well be buying Ethereum. And Counterparty has no reason for being based on Bitcoin at that point.

Shouldn’t BTC holders be able to download Counterwallet, buy XCP, and then be off to the races?

I want to be able to buy coins from Coinbase, send them to an offline wallet, and then be ONE step at most away from signing up for a P2P stock market.
If that isn’t possible, I think you have a BIG problem. Your platform is suddenly no better than Ethereum and they will EAT YOU ALIVE on social media. You want to work directly with Bitcoin, at all costs.

Keeping BTC-XCP trades routes around all kinds of regulations. This is the easiest and fastest possible path for market adoption of Counterparty, AINEC.

Is it possible for Counterparty to match multiple orders? Any way for troll orders to compete against real orders?
[/quote]

The proposal wouldn’t disallow direct BTC/XCP trades… it would just require holding some XCP for it to work.

I think the best proposal to fix this - make able to close open order by order-id. Do not wait for matching. Just specify what order you want to fullfill and what amount of it. That’s all.
From that point, any front-end will manage how to show the orders, how to sort and how to match. They will just execute “fullfill existing order” command. In that way, any troll can list as many fake orders as he wants - front end will recognize them (by btcpay-expired for example) and completely ignore.

[quote author=PhantomPhreak link=topic=132.msg851#msg851 date=1393279103]The proposal wouldn’t disallow direct BTC/XCP trades… it would just require holding some XCP for it to work.[/quote]

Yes, understood. 99.99999% of the world population does not own XCP. It blocks direct BTC/XCP trades just the same.

[quote author=PhantomPhreak link=topic=132.msg830#msg830 date=1393257375]
So there’s a problem with the decentralised exchange: miners don’t have to pay BTC fees to troll the BTC/X order books, because they can, if they’re careful, collect the fees themselves. If I’m not mistaken, it works out that a miner with 10% of the network’s hash power can troll the order book every 100 blocks, for 10 blocks (the time allotted for BTCpays), after which it returns to normal. Consequently, I think it would be best if those fees were replaced entirely with escrowed XCP, as proposed by gacrux. Because any orders selling XCP for BTC without a required XCP escrow will get quickly trolled for a significant fraction of their existences, I don’t see the point of keeping the BTC fee system around at all. The only disadvantage to this new system that I can see, is that you’d have to own (but not pay!) some XCP in order to buy XCP with BTC on the DEx.

See here for some discussion of how the new system would work. Though, again, I’d like only to use XCP escrow, and remove the BTC fees completely (of course in a backwards-compatible fashion).
[/quote]


I favor the Escrow with XCP proposal above in that you remove the BTC fee that can obviously incentivize miners to cheat the system an collect more BTC for themselves.


My only question would be what is the size of the XCP escrow or own in order to do the transaction? To the concerns brought up, if the hurdle is too high as the price of XCP increases, this may result in loss of engagement to other protocols which may not have exorbitant requirements for escrow.


However, given that the escrow can always be adjusted in size as the price of XCP changes, I don’t think fears of discouraging users is totally justified, but I could be wrong.

[quote author=Bountyful link=topic=132.msg855#msg855 date=1393280098]I favor the Escrow with XCP proposal above in that you remove the BTC fee that can obviously incentivize miners to cheat the system an collect more BTC for themselves.


My only question would be what is the size of the XCP escrow or own in order to do the transaction? To the concerns brought up, if the hurdle is too high as the price of XCP increases, this may result in loss of engagement to other protocols which may not have exorbitant requirements for escrow.


However, given that the escrow can always be adjusted in size as the price of XCP changes, I don’t think fears of discouraging users is totally justified, but I could be wrong.[/quote]

There’s no such thing as “simply buy a little XCP (on a central exchange), and then…”…

It is NEVER that easy.