Proposed change to order fee mechanism

[quote author=supervine link=topic=132.msg852#msg852 date=1393279868]
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]

The big problem with that is you won’t know if your proposed order match is made for ten minutes, and everyone will try to match the same orders.

[quote author=Bountyful link=topic=132.msg855#msg855 date=1393280098]
[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]

The escrowed amount can float, as BTC fees do today.

At least make proportional fee. Allow users to buy up to 10 XCP with 0 fee. Then fee grows with order size. So newcomers will be able to get some XCPs too…

Edit: Nevermind, not enough sleep it seems, I take it they can hold the broadcast of the troll transaction until they have mined it to recuperate the fees -

Having only XCP escrow without someone kind of initiate or BTC fee option doesn’t sound right - this means a new user is dependent on some centralized entity.
As an alternative to allowing fees in BTC or XCP (I am still not convinced that a large pool of miners would exploit this to troll, since it would only be effective against other buyers without XCP escrow anyways)-
What about allowing direct order matching, and only direct order matching if an XCP escrow is not possible - This should allow someone to readily initiate an XCP balance, and then use the escrow mechanism - 

[quote author=brenzi link=topic=132.msg844#msg844 date=1393275648]
[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]
+1
this problem arose when xcp first lunched. the solution should not be any different.
we must keep direct btc / xcp trade in the dex.
this will allso a great continuation of the proof of burn concept xcp is based upon.
as pp pointed out, it comes with a price of bloating the blockchain, but i believe the advantages outway the disadvantages.

[quote author=crange link=topic=132.msg861#msg861 date=1393282064]+1
this problem arose when xcp first lunched. the solution should not be any different.
we must keep direct btc / xcp trade in the dex.
this will allso a great continuation of the proof of burn concept xcp is based upon.
as pp pointed out, it comes with a price of bloating the blockchain, but i believe the advantages outway the disadvantages.[/quote]

If there’s one thing I’ve learned, it’s that Bitcoin core devs are fucking CRAZY about bloating the blockchain. Don’t even go there. I have no problem with the burn idea myself, but I find the idea of a zero fee option for amounts <1 XCP to be viable with much less damage to political capital. It’s too clear of an opportunity for the competition to trash talk XCP in social media and on mailing lists. Blockchain bloat won’t end well.

Let’s try zero fees for amounts <1 XCP so noobs can get going with pure BTC reserves.

[quote author=Polo link=topic=132.msg862#msg862 date=1393282316]
[quote author=crange link=topic=132.msg861#msg861 date=1393282064]+1
this problem arose when xcp first lunched. the solution should not be any different.
we must keep direct btc / xcp trade in the dex.
this will allso a great continuation of the proof of burn concept xcp is based upon.
as pp pointed out, it comes with a price of bloating the blockchain, but i believe the advantages outway the disadvantages.[/quote]

If there’s one thing I’ve learned, it’s that Bitcoin core devs are fucking CRAZY about bloating the blockchain. Don’t even go there. I have no problem with the burn idea myself, but I find the idea of a zero fee option for amounts <1 XCP to be viable with much less damage to political capital. It’s too clear of an opportunity for the competition to trash talk XCP in social media and on mailing lists. Blockchain bloat won’t end well.

Let’s try zero fees for amounts <1 XCP so noobs can get going with pure BTC reserves.
[/quote]

Don’t forget, what there is bitcoin fee of 0.0003 for each transaction. Even for 0 fee <1 XCP transactions. So blockchain will be bloated, but miners got paid for that. That was the idea from the start.

Maybe to facilitate the first purchase of XCP, we could add the concept of "direct order". This type of order:

- Is associated with a unique payment address
- Did not match any other order
- Must be paid directly by a "bctpay" (without order match) by the owner of the address associated with the "direct order"

Counterparty serves as escrow for transactions traded on the forum or elsewhere. This can be a good complement to Centralised exchanges to buy his first XCP.

[quote author=JahPowerBit link=topic=132.msg868#msg868 date=1393292414]
Maybe to facilitate the first purchase of XCP, we could add the concept of "direct order". This type of order:

- Is associated with a unique payment address
- Did not match any other order
- Must be paid directly by a "bctpay" (without order match) by the owner of the address associated with the "direct order"

Counterparty serves as escrow for transactions traded on the forum or elsewhere. This can be a good complement to Centralised exchanges to buy his first XCP.
[/quote]


+1


I agree, it’s possible to game the BTC fees then they have to go.

gacrux’s proposal was based upon BTC miner fees and the example of a default fee of 0.00002 of XCP matched would result in essentially ‘no additional fee than for miners’ for buy orders of 5 XCP and less.


Would a similar small threshold be possible to allow small orders of get XCP to fill without having to pre-own XCP. eg 5 XCP?


In the case where a btcpay was not performed prior to match_expiry would the XCP held in escrow be destroyed as per gacrux’s proposal?

[quote author=PhantomPhreak link=topic=132.msg830#msg830 date=1393257375]
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.
[/quote]


could it be dust of xcp? and would there be an automatic way to give them to new users?


I think polos point is really important

[quote author=Bountyful link=topic=132.msg869#msg869 date=1393292896]
[quote author=JahPowerBit link=topic=132.msg868#msg868 date=1393292414]
Maybe to facilitate the first purchase of XCP, we could add the concept of “direct order”. This type of order:

- Is associated with a unique payment address
- Did not match any other order
- Must be paid directly by a “bctpay” (without order match) by the owner of the address associated with the “direct order”

Counterparty serves as escrow for transactions traded on the forum or elsewhere. This can be a good complement to Centralised exchanges to buy his first XCP.
[/quote]


+1
[/quote]

‘Direct’ orders are highly problematic because they can overlap.

[quote author=Global_trade_repo link=topic=132.msg870#msg870 date=1393293335]

I agree, it’s possible to game the BTC fees then they have to go.

gacrux’s proposal was based upon BTC miner fees and the example of a default fee of 0.00002 of XCP matched would result in essentially ‘no additional fee than for miners’ for buy orders of 5 XCP and less.


Would a similar small threshold be possible to allow small orders of get XCP to fill without having to pre-own XCP. eg 5 XCP?


In the case where a btcpay was not performed prior to match_expiry would the XCP held in escrow be destroyed as per gacrux’s proposal?
[/quote]

The miner could still clear all small orders for free, then.

Yes.

[quote author=PhantomPhreak link=topic=132.msg873#msg873 date=1393302053]
[quote author=Global_trade_repo link=topic=132.msg870#msg870 date=1393293335]

I agree, it’s possible to game the BTC fees then they have to go.

gacrux’s proposal was based upon BTC miner fees and the example of a default fee of 0.00002 of XCP matched would result in essentially ‘no additional fee than for miners’ for buy orders of 5 XCP and less.


Would a similar small threshold be possible to allow small orders of get XCP to fill without having to pre-own XCP. eg 5 XCP?


In the case where a btcpay was not performed prior to match_expiry would the XCP held in escrow be destroyed as per gacrux’s proposal?
[/quote]

The miner could still clear all small orders for free, then.

Yes.
[/quote]

If you implemented a very low maximum XCP order match (just enough for the escrow for future orders) for BTC sellers without escrow, trolling should become very difficult - at least for a 1500 or so XCP order if the max order match is 3xcp would require 500 troll orders to wall.

But I really don’t see what you can do about a hostile pool - they could generate endless amounts of troll orders - on the other hand if there really is a pool of Bitcoin miners with significant hashing power conspiring to, spam the network with troll orders, then I think this would be a bigger issue than simply DEX trolling in counterparty…

[quote author=porqupine link=topic=132.msg874#msg874 date=1393303223]If you implemented a very low maximum XCP order match (just enough for the escrow for future orders) for BTC sellers without escrow, trolling should become very difficult - at least for a 1500 or so XCP order if the max order match is 3xcp would require 500 troll orders to wall.

But I really don’t see what you can do about a hostile pool - they could generate endless amounts of troll orders - on the other hand if there really is a pool of Bitcoin miners with significant hashing power conspiring to, spam the network with troll orders, then I think this would be a bigger issue than simply DEX trolling in counterparty…[/quote]

I also like this idea of enacting a dedicated market only for obtaining XCP in sub 0.10 increments. The “XCP_Recharge” market. Order less than 0.1 XCP at a time without XCP reserves.

You could even impose a disproportionately large, nonrefundable BTC fee for the recharge market to deter troll orders. Even if costs 1 mBTC minimum fee to obtain 0.01 XCP on recharge, it would be a far more convenient and quicker method than going to a centralized exchange, and the market would be plenty liquid even if overrun with trolls.

[quote author=PhantomPhreak link=topic=132.msg873#msg873 date=1393302053]
[quote author=Global_trade_repo link=topic=132.msg870#msg870 date=1393293335]

I agree, it’s possible to game the BTC fees then they have to go.

gacrux’s proposal was based upon BTC miner fees and the example of a default fee of 0.00002 of XCP matched would result in essentially ‘no additional fee than for miners’ for buy orders of 5 XCP and less.


Would a similar small threshold be possible to allow small orders of get XCP to fill without having to pre-own XCP. eg 5 XCP?


In the case where a btcpay was not performed prior to match_expiry would the XCP held in escrow be destroyed as per gacrux’s proposal?
[/quote]

The miner could still clear all small orders for free, then.

Yes.
[/quote]


You’re correct.


If the priority is to stop the troll orders then I don’t have any other bright ideas.


Having to own a little XCP first to buy XCP on the DEX is quite a disadvantage IMO.



I just don’t see the troll orders being a real problem, if they are restricted to a low maximum XCP buy without escrow -

[quote author=porqupine link=topic=132.msg877#msg877 date=1393319176]
I just don’t see the troll orders being a real problem, if they are restricted to a low maximum XCP buy without escrow -
[/quote]

That will just make trolls sweep out small orders.

Moreover, “low maximum XCP” is an obvious magic number problem: depending on the price of XCP (and on personal taste, besides) what is a low maximum will vary. And I believe you would need to change the protocol every time you wanted to change the “low maximum XCP”.

The simplest solution is just to burn the BTC, but politically this is a probably a very bad move.

Will it’s not that bad of a magic number problem - the maximum XCP buy just needs to be X higher than required escrow to buy more XCP - so even if % of order in XCP escrow floats between say 5% and .05% as long as someone can get between .5 and 5 XCP that would be enough to place an order for more XCP.

And if what we are talking about is an entire hostile pool with significant hash power spamming thousands of troll orders - Then I’m not sure the protocol should be altered in significant ways to fail-safe against something that really seems like an extreme case (as a side note potential political hostility from some of the devs might lead to problems that are much larger and more likely to manifest).

Edit: Ok, there could be a complete way of doing this, if an order has a maximum percentage size of itself that can be matched by non-escrow initiated BTC sell orders. Although that’s another magic number =/ 

I don’t have anything new to add except for motivation. People really need Counterparty to be easy to use:

[quote]Honestly, if people can’t feel secure leaving their bitcoins ONLINE, which is one of the selling points, then bitcoin does not have a future. If people have to physically move their bitcoins from cold storage everytime they want to use it, bitcoin has no future.

Do you know how much money is stored online? ( Banks, online stock brokers, credit cards, etc ). Can you imagine online banking, buying from amazon, trading stocks online, etc, if one had to physically move their cash from “cold storage” each time they wanted to commit a transaction?[/quote]

http://www.reddit.com/r/worldnews/comments/1yv6j1/mt_gox_is_dead_rumors_swirl_over_insolvency_of/cfo8uu4

Counterparty core team: the world is at your fingertips. Please do something, ANYTHING to ensure Bitcoin holders can use Counterparty directly instead of turning it into yet another altcoin that must be purchased before hand. I’m praying there’s a solution other than burning. This may be something worth creating a bounty for.