I had an idea and wanted to ask you if you think it would be possible. I also put the same post in another BURST forum (forums.burst-team.us) but unfortunately, but no discussion started there. That’s why I try here.
My idea is a decentralised exchange service for altcoins, based on blockchain technology to filter out the middle person/exchange services.
Please note that I do not know all the proper in depth technology of blockchain technology. But hey, that’s why I am asking you
Lets call this exchange blockchain EBchain. This EBchain must be able to interact with other blockchains, for example the BURST and the Bitcoin blockchain. I see this as a complicated smart contract, but I am not sure if it is actually possible.
This is how I envision it might work:
For the sake of an example we take person #1 who wants to sell his/her BURST for Bitcoin and person #2 who want to sell its Bitcoin for BURST.
When a trader puts its sell or buy bit into the EBchain, the EBchain creates a BURST and a Bitcoin address. The funds of the trade must be transferred to this address and the private keys are hold by the Exchange blockchain.
- Trader #1 transfers its BURST to the EBchain-BURST-account-trader#1 account. The EBchain-Bitcoin-trader#1 stays empty for now.
- Trader #2 transfers its Bitcoin to the EBchain-Bitcoin-trader#2 account. The EBchain-BURST-account-trader#2 stays empty for now.
Now Trader #1 creates his/her sell bit in the EBchain. This bit should at least contain the amount of BURST to sell and at what Burst-to-Bitcoin price.
If Trader #2 has created his/her buy bit into the EBchain, the EBchain compares all the sell and buy prices put into the EBchain and only exchanges the BURST and Bitcoin funds if the sell and buy prices are equivalent (or better?).
So if sell and buy prices are the same for our Trader #1 and #2, then:
- BURST is transferred from EBchain-Burst-account_trader#1 to EBchain-Burst-account_trader#2
- Bitcoin is transferred from EBchain-Bitcoin-account_trader#2 to EBchain-Bitcoin-account_trader#1
If no sell and buy prices are the same for our Trader #1 and #2, then nothing is exchanged and we will until the next EBcoin block if any buy and sell prices are the same.
- A trader can make a bit in the Exchange blockchain using partial or all its funds in the BURST address.
- Funds used for a buy or sell bit are being ‘locked’ by the EBchain.
- The trader can always cancel its buy or sell bit, at which the funds are being unlocked again. Obviously this can only happen if no exchange of funds has taken place.
- A trader can send a request to the blockchain to transfer its funds of a EBchain-Bitcoin-account or EBchain-BURST-account to an account of his choosing.
The exchange will have the following costs:
- Cost of transaction from Burst to Burst and Cost of transaction from Bitcoin to Bitcoin. These costs can be split among both traders.
- Cost of the exchange itself, which will be used as a fee for the miners of the EBchain.
It would be great if the same EBchain can be used for multiple altcoins and this could somehow be done with the current proof-of-capacity BURST uses. EBchain could stand for ExchangeBurstChain
So, what do you think about this idea? Does it already exist? is it feasable?
Please let me down easy if I simply don’t understand the limits of blockchain technology and this is a utterly stupid idea But also please explain why.
Thanks for your comments!