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Darkcoin's Instant Transactions could revolutionise cryptotrading

Dr.Crypto

Dr.Crypto

Member
In my early days as a crypto-trader, it wasn't rare that I stumbled upon so-called arbitrage opportunities, i.e. the fact that a same asset could be quoted at different prices across different exchanges.

For instance, guy A on Cex.io might be willing to sell 52 DRK for 1 BTC while guy B on Cryptsy may be willing to pay 1 BTC to buy 50 DRK. One possible action would be : buy 52 DRK for 1 BTC on Cex.io, sell 50 DRK for 1 BTC on Cryptsy, and at the end of the operation, I have my original 1 BTC back + 2 DRK from arbitrage.

Other arbitrage opportunities may appear that do not involve transferring funds from one exchange to another, such as going through different trading pairs (e.g., combining three pairs DRK / USD, BTC / USD and DRK / BTC), but these are mostly monitored by bots, so that humans seldom have time to make money on that.

However, arbitrage opportunities between different exchanges still appear every now and then, but the main issue is the transaction time to transfer funds from one platform to another. For instance, on the previous example, guy B's buying order might be filled / canceled while I'm transfering the DRK I intended to sell, especially since getting enough confirmations often takes between 30 minutes and 1 hour (sometimes more).

Now, with instant transactions, arbitrage would be resolved much faster, as there would be significanly less risks for traders to lose opportunities due to their coins being stuck on the blockchain. In the end, resulting in the price of DRK distributed much more evenly across all exchanges.

Another consequence of this would be that DRK could become the cryptocurrency of choice for trading, even when DRK isn't involved. Supposing that arbitrage opportunities exist between other pairs, such as BTC / LTC. Just like before, supposing that A wants to sell 52 LTC for 1 BTC on Cex.io and that B wants to buy 50 LTC for 1 BTC on Cryptsy, this creates an arbitrage opportunity, which is still conditioned by the possibility to move the LTC fast enough from Cex.io to Cryptsy. Now, due to my previous point, supposing that DRK is now valued pretty much the same everywhere, it would be possible to "move" the LTC much faster by selling them for DRK on Cex.io first, move the DRK to Cryptsy instantly and trade them back into LTC before selling the LTC for BTC to guy B.

InstantX would just open an infinite set of new trading opportunities that do not concern just DRK but every market.

tl;dr: DRK could become a central piece for immediate transfer of value for high-speed trading across different exchanges and cryptocurrencies.
 
This is *extremely* interesting.

You could take this beyond mere arbitrage. Bitcoin could be sent nearly instantly in the same way (albeit by using exchanges).

David wants to send 3 BTC to Ashley.
David has his 3 BTC on Cryptsy.
David buys 3 BTC worth of DRK and uses InstantX to transfer the DRK to Ashley.
Ashley uses InstantX to transfer the DRK to her preferred exchange.
Ashley sells the DRK and buys 3 BTC with it.
Now the BTC is in a wallet she controls and if it takes an hour to transfer off the exchange, no big deal.

Or you could go further--what if word got out that a Gox-like event was occurring and people wanted to pull their money out of the exchange in a hurry. Simply sell their cryptos for DRK as fast as they can, and use InstantX to remove the DRK from the exchange before the exchange goes under. Then sell the DRK on another exchange at a later time to recover their original asset (likely at a depreciated rate, but it would be better than losing everything because you tried to wait an hour for a BTC transaction to confirm).

Up until now I had never recognized the true value of InstantX...
 
It's starting to become obvious Evan has thought this through and is playing the long game... We're getting a decentralised platform that will be robust enough to handle commercial volumes...

The implications, we can probably fathom half, the other half will come as a nice surprise once we go live...
 
The main delay in transactions is often the exchange houses themselves. Instant transaction currencies already exist and are used in the way you describe.
 
veta said:
The main delay in transactions is often the exchange houses themselves. Instant transaction currencies already exist and are used in the way you describe.
Click to expand...
You're talking about regular stock exchanges, right? Because I made sure to focus my post on cryptotrading, as written in the title :)

My point was really that DRK's InstantX extends so much far beyond the mere ability to insta-buy your bread at the bakery in your everyday life (I'm actually sure most shops would already be okay with a 0-confirmation BTC transaction), but that it could become a central asset for people who drive the price up and down - traders. As Ignition75 said, I believe this is just one of the implications we're realising so far.
 
What I mean is that there are a variety of extant cryptocurrencies that facilitate high speed transaction and are used in the ways you described. Here is a list from a year ago. Now we might say that the vast majority of these coins are ad hoc renditions of Bitcoin with minor value changes. And we would be right. But that doesn't stop them from being integrated on cryptocurrency exchanges and being used exactly in the way proffered here.

To reiterate the majority of the delay in arbitrage is often from the exchanges themselves. This is less so in real exchange houses, viz. stocks, where the determining factor is geography and/or secret fiber optic priviledges (e.g. Flash Boys).

Nevertheless, InstantX is notable for being not only as fast or faster but magnitudes more secure.
 
Ignition75 said:
It will be about that one or two killer apps that put's this exciting new technology in the hands of the users.

Find those killer apps and you have found a large part of your marketing and communications strategy.
Click to expand...
Yeah, and those will come with time. With more people interested in Darkcoin, there will be more companies wanting to make money off of those people, so they create apps to help them. Once they're made, they will attract more users, and the snowball rolls!
 
TaoOfSatoshi said:
Yeah, and those will come with time. With more people interested in Darkcoin, there will be more companies wanting to make money off of those people, so they create apps to help them. Once they're made, they will attract more users, and the snowball rolls!
Click to expand...
Yes there is going to be one or two nice moments in the future for Evan and the Project Team when they realise something that has been staring at them all this time, very typical with projects delving into the unknown.

Then an awesome way to implement this new feature is found and it gets made a MasterNode Service, the economy grows and gains a new dimension ;p
 
Ignition75 said:
Yes there is going to be one or two nice moments in the future for Evan and the Project Team when they realise something that has been staring at them all this time, very typical with projects delving into the unknown.

Then an awesome way to implement this new feature is found and it gets made a MasterNode Service, the economy grows and gains a new dimension ;p
Click to expand...
I really like the way you think, pal!:grin:
 
veta said:
What I mean is that there are a variety of extant cryptocurrencies that facilitate high speed transaction and are used in the ways you described. Here is a list from a year ago.
Click to expand...

Fastest listed is Fastcoin, 48 seconds. InstanTX should be over twice as fast...

Hopefully InstanTX will have more people trading in and directly back out again on exchanges, instead of letting their balance sit there and either dwindle in value or vanish outright.

I poked my head out of the DRK thread on BCT yesterday and it's one big shitstorm of sociopaths and suckers. Bittrex looks like the next exchange that's going to get 'hacked.'
 
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