Decentralized Stock Exchange

Blockchain, the banks are already on it but there is always one problem, they are fine when you are in the normal standard deviations, but when you get to 3/4 deviations the distributed systems implode. They work 95% to 99% of the time, even up to 99.9% and 99.99%, but when they go it's the same force as an exploding star and takes down the whole network!

Distributed systems are designed for the lowest common demoninator, and that's not 3/4 sigma events. It's exactly the same argument as HFT vs market maker, the HFTs don't have to honour participation, market makers do. Distributed systems can pull the plug, central exchanges can't, with centralised you're buying prevention, it only takes one negative event for a distributed system and that's it, they're out of business.
 
birzos said:
Distributed systems are designed for the lowest common demoninator, and that's not 3/4 sigma events. It's exactly the same argument as HFT vs market maker, the HFTs don't have to honour participation, market makers do. Distributed systems can pull the plug, central exchanges can't, with centralised you're buying prevention, it only takes one negative event for a distributed system and that's it, they're out of business.
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You seem to have this reversed -- distributed systems can be made resistant to disruption of any one node (in fact, that was the whole motivation for DARPA's development of the Internet), while a completely centralized system is subject to a single point of failure (forgive me for pointing out the obvious). Take a couple of examples from the US equities space: single-point-of-failure caused a total failure with the August 2013 Nasdaq SIP crash, for example; yet US equities have continued trading when single matching venue has gone out (which has occurred numerous times in the past few years).

That said, the fault-tolerance of a distributed system is entirely dependent on its architecture. There are many different types of systems that are very robust. Bitcoin's distributed ledgers have gotten the attention due to the success of Bitcoin itself, but distributed databases have been implemented for decades in academic computer science (e.g. Paxos), as well as commercial databases.

By the way, in the realm of US equities (the topic of the OP's DSX idea), market makers do indeed "pull the plug" quite often in today's environment -- if that were not the case, then flash crashes would never occur. The requirements for a "market maker" today are embarrassingly weak compared with what was expected of the specialists of the NYSE of old, and the very role of "market maker" (as well as those of any other type of "privileged large customer") should be explicitly banned, IMO. In today's market structure, these "roles" seem to be used mostly by the largest HFT's that also (legally) queue jump using internalization/wholesaling.
 
kmiklas said:
Heya Peeps,
I plan to use Angular 1.0, Objective-C, Java, C++, and MySQL.
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Angular 1 and Obj-C. Fuck someone put him out of his misery. Keith, you know it's 2016 right?

I like your idea, but what tech are you using? Bitcoin, Ethereum? If nothing else, this is a good project for someone with tech skills.
 
jj90 said:
Angular 1 and Obj-C. Fuck someone put him out of his misery. Keith, you know it's 2016 right?

I like your idea, but what tech are you using? Bitcoin, Ethereum? If nothing else, this is a good project for someone with tech skills.
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Agree on Ang 1. Switching to React. As for Obj-C not much choice there, unless you think Swift?

Right now I have a new innovation for a tech in mind. You (the issuer of shares) create a new equity, and offer a defined number; say, 1M shares of jj90 for $1 each. This security gets a unique ID. Yep, you just create them out of thin air--much like money in a mortgage is created on your signature :). You then have your IPO, and sell them on the DSX. That's the "Offer" button/screen on http://www.decentralizedstockexchange.com
(work in progress)

Ownership is transferred to other account holders as they are sold. The document of record is a JSON file, a copy of which is kept on many devices within the "cloud" of account holders. Something like this:

Code: 
{ "dsxShares" :
    { "jj90" :
        { "kmiklas" : 500000,
           "jj90" : 250000,
           "Baron" : 250000
        }
    },
    { "BerkshireZ" :
        { "warrenBuffet" : 10000000,
           "kmiklas" : 25000
        }
    },
    { etc.... }
}

Putting these data everywhere, viewable by everyone, provides tremendous security. Very hard, if not impossible, to hack a fully disclosed document of record that everyone is watching. It would be like trying to fudge your tax return at an IRS accounting convention--forget about it. Let there be light.

Are these shares worth a buck each? Well, this is really a risk issue, with the usual questions: How good is their business plan? What is their product? How will they make money? Who is offering the shares? Buyer beware.

What will be my first IPO? The DSX, of course! I will offer shares of the DSX, on the DSX! :D Y'all can get in on the action, and make mad profitz when we get bought by Amazon.
 
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vanzandt said:
Cramer last night was talking about buying stocks on Amazon....
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This would be great except for the fact that Cramer is an idiot. What he was talking about was telling Amazon to buy/sell certain stocks as soon as certain economic numbers or Fed statements come out in an algorithmic way, thereby beating HFTs. I.e., you could set up an order at Amazon that said, "If fed statement was dovish, then buy TWLO." He was bemoaning the fact that HFTs auto-parse the news quicker than humans can and that they get all the profits. And he wants Amazon to help him beat the HFTs. There are many problems with what he suggested.
 
@kmiklas: Yes, Swift. Personally I'm split on Angular2 or React.

Good on you if you are building your own blockchain, but what I was saying is Ethereum does pretty much all that you talked about. There is the whole gas thing though.

Solidity is more or less JavaScript, but right now Ethereum doesn't natively support JSON. Maybe you could build the support for it.
 
This whole idea has a high "take-the-money-and-run" feel to it. How is it going to be regulated? What exactly am I buying and who is regulating their accounting?

It still sounds a bit like a bankroll.me website. GoFundMe or kickstarter. And they also have regulating issues when the issues fails to deliver and runs.
 
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