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BITCOINEX.XCP and the Counterparty Gateway

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  • yampi

    When I send BITCOINEX to get bitcoins, the small amount of satoshis sent to 1Coin address in the transaction to redeem BITCOINEX should be sent back with the redeemed funds.

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  • hotarugrey

    well i think it sent back as bitcoinex, the sistem count those small amount as a 'buy' for bitcoinex, so the address sent another bitcoinex sent tou our address

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  • hotarugrey

    doubled post, connection problem

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    Zen goes down, Zeus goes up ZeusHash

    genesis-mining get 2.5% discount on purchase with this code : mcCaYI

    do you klnow that you wont get a lot of LTBc by spamming? instead you'll get spam flag and that will only decrease your payment.

    get yourself used to read before ask

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  • Cryptonaut

    @hotarugrey well i think it sent back as bitcoinex, the sistem count those small amount as a 'buy' for bitcoinex, so the address sent another bitcoinex sent tou our address

    Thats actually a bug which I need to fix ASAP (out of town for a few days at the moment). Basically it has to do with the fact that counterparty usually uses OP_RETURN instead of multisig for their transactions. The problem is that the service im using to look at BTC transactions (blockr.io) does not recognize OP_RETURN (but it does for multisig), so I have no way at the moment to differentiate between a purely BTC transaction and a counterparty one. Will post back here when I get it fixed.

    Chief Architect - Let's Talk Bitcoin!
    Co-Founder - Tokenly
    Owner - IronClad Web Technologies
    BITCOINEX - SPECULATE - EARNFREEBTC - BOOKKEEPER - IRONCLADWEB
    Adbit.co Bitcoin Advertising

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  • hotarugrey

    @cryptonaut sir can you check this trx https://www.blockscan.com/txInfo/11655247 the vending did not send back the btc... no btc in the vending address...

    tip me : 1GoVbdSUuKBKNvtNPXmwdLmNZxxYBDPFkP

    Zen goes down, Zeus goes up ZeusHash

    genesis-mining get 2.5% discount on purchase with this code : mcCaYI

    do you klnow that you wont get a lot of LTBc by spamming? instead you'll get spam flag and that will only decrease your payment.

    get yourself used to read before ask

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  • Cryptonaut

    @hotarugrey @cryptonaut sir can you check this trx https://www.blockscan.com/txInfo/11655247 the vending did not send back the btc... no btc in the vending address...

    Yes sorry for the delay, there was a server crash. Back up now. Still need to fix the extra BTC it detects with counterparty transactions

    Chief Architect - Let's Talk Bitcoin!
    Co-Founder - Tokenly
    Owner - IronClad Web Technologies
    BITCOINEX - SPECULATE - EARNFREEBTC - BOOKKEEPER - IRONCLADWEB
    Adbit.co Bitcoin Advertising

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  • hotarugrey

    @cryptonaut

    @hotarugrey @cryptonaut sir can you check this trx https://www.blockscan.com/txInfo/11655247 the vending did not send back the btc... no btc in the vending address...

    Yes sorry for the delay, there was a server crash. Back up now. Still need to fix the extra BTC it detects with counterparty transactions

    thank you sir, now it's coming. but it still come with those tiny bitcoinex...

    tip me : 1GoVbdSUuKBKNvtNPXmwdLmNZxxYBDPFkP

    Zen goes down, Zeus goes up ZeusHash

    genesis-mining get 2.5% discount on purchase with this code : mcCaYI

    do you klnow that you wont get a lot of LTBc by spamming? instead you'll get spam flag and that will only decrease your payment.

    get yourself used to read before ask

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  • Rob

    @cryptonaut How does BITCOINEX actually sustain a valuation equal to Bitcoin? I mean, it's defined that way, but how does one know they will actually be able to get one Bitcoin for one BITCOINEX, even say in a number of years? Is there some economic function to make sure BITCOINEX stays on par with Bitcoin? Is it backed by something? If I want to exchange my BITCOINEX for BTC, where can I do that? And can't you (in theory) just create BITCOINEX out of thin air, kind of the opposite of the ethos of Bitcoin? I understand the token's theoretical usefulness, but I don't understand how it functions in the real world. Are people using BITCOINEX? If so, how?

    I don't mean this to come off as hostile, but as I'm doing some accounting, and researching every CP asset I have. And so I got curious about this token... I think of my BKEYCHAIN tokens, which only have a value if you trust I will send a Keychain when you redeem a token. In theory, I could sell a bunch of tokens, and never redeem anything (or die or something), in which case the tokens would be pretty worthless. I'm trying to understand if BITCOINEX is basically the same.

    No hurry on an explanation, just trying to understand.

    Thanks!

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  • Cryptonaut

    @rob No worries, glad to clear up any confusion! :)

    So, like all user created assets, there is a degree of trust and centralization that you need to be aware of. The nice part is that tokens have many of the same properties as Bitcoin (due to living on Bitcoin), so the ability to create transactions, move tokens around etc. is totally decentralized, and as the asset creator, I cannot manipulate your balances or have any other direct influence over your stash.

    The parts that are centralized and require trust are 1) issuance and 2) value proposition.

    The issuance issue (heh) can be mitigated by simply creating X amount of tokens to begin with and then locking the asset, but that has its own set of trade offs. For instance, if I print off 100 BITCOINEX and am telling people they are worth 1 BTC each, but I can not actually prove that I have 100 BTC to exchange for them.. why should they believe me? Before BITCOINEX, there was a token by the guys at Vennd called XBTC, which is where I stole this idea from. Anyway, they issued an entire 21 million XBTC and locked it in an attempt to make it on par with bitcoin.. even though there is simply no possible way there will ever be even like 0.001% of bitcoin in existence deposited with them. Just does not make sense for "proxy" tokens like this IMHO.

    The value proposition issue is a lot trickier, and usually just boils down to "do you trust that the person who created this token is going to do what they say they are going to do and not disappear". If I go away, unless I hand off the BITCOINEX project to someone else and they keep it running, then it becomes worthless. If the LTB website shuts down, then LTBCOIN will probably become worthless to. However, it is possible that say if a whole bunch of websites used LTBC as their native currency, it would survive and still have some value... BITCOINEX on the other hand, since the current scheme requires someone to be able to actively issue new units and it's backed directly by deposits of another token - probably would not be able to survive on its own. Even with smart contracts (which we are still waiting on to become usable), because it interacts directly with BTC, there is still the question of "who holds the private keys", which AFAIK no one has figured out a good solution for yet.

    Ok, so here's how the BITCOINEX token works

    There is a single vending address, basically the same thing as swapbot (except using the old prototype that I built, because it has some features for auto-issuance and I also wanted it fully under my own control outside of tokenly for personal and potential legal reasons).

    You can see the address here: 1CoinEXLQtivDjckWMRBbhgVJk9RdwdYbR

    The vending machine is set up to give out 1 BITCOINEX for every 1 BTC received or every 1 XBTC received (Vennd.io's token, phasing it out :p), minus a small 0.5% deposit fee which mostly goes towards paying the transaction fees. It is also set up to receive back BITCOINEX in exchange for BTC on an exact 1:1 ratio (no fee). There is no front end interface, you can only interact with it by sending it BTC or sending it back BITCOINEX.

    The machine will use whatever BITCOINEX it has available to give out for new deposits, but if there is not enough in the 1CoinEX address, it creates a new issuance for whatever the difference is. For instance, if it only has 1 BITCOINEX available but somebody deposits 5 BTC, it will create 4 new tokens and then send it all to them. This is the only time new tokens are created, and currently after this whole time only a modest 4.7 exist lol. I could technically manually issue a bunch and give them to myself, but it would be super obvious and I don't think people would trust me any more.

    With the way that the issuance is done, it makes sure that for every 1 BITCOINEX in existence, there is always at least 1 BTC available in the vending machine to back it up. If you look at the 1CoinEX address and add up all the BITCOINEX + XBTC + BTC it has, it should come out to exactly or (more often) a little bit over the total amount of BITCOINEX in existence. There have been a few hiccups where I have had to manually rebalance things though (e.g bug causing accidental double payment)

    Are people using BITCOINEX? If so, how?

    Sort of. I'm pretty sure I am the only one with projects making active use of it. Specifically, the SPECULATE and EARNFREEBTC projects, which pay out dividends once per week. Probably about 50 or so people which are actively collecting the BITCOINEX payouts and trading them in for their BTC every so often.

    The reasoning behind using the BITCOINEX proxy token is that I quickly discovered that sending out dividends in pure BTC does not work very well. For example if someone only has 1 EARNFREEBTC token and I'm giving out 25 satoshis, that is well below the 5500 satoshi dust limit which means that user is simply going to get nothing. Also, say if you have 1,000 token holders, you would have to either create really big and expensive transactions going to 1000 different addresses, or split the dividend up into multiple transactions etc... either way paying way more in transaction fees.

    With Counterparty tokens, you can create a single "dividend transaction" (a specific transaction type) which instead of sending actual btc transactions directly to 1,000 or 10,000 addresses, it just embeds a message saying "any addresses holding token X as of block 310456 now have a bit more of token Y at rate of 0.00000025 per unit". This means that I can send out dividends as low as 1 satoshi per unit, to an unlimited number of addresses, and without polluting (as some would say) the blockchain and with paying just a single normal sized transaction fee.

    Something like XCP could be used (the only fully decentralized counterparty token), but using a fixed value proxy token like this just makes the math so much easier, since all people really care about is getting their BTC :P

    Chief Architect - Let's Talk Bitcoin!
    Co-Founder - Tokenly
    Owner - IronClad Web Technologies
    BITCOINEX - SPECULATE - EARNFREEBTC - BOOKKEEPER - IRONCLADWEB
    Adbit.co Bitcoin Advertising

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  • pooktwo

    @cryponaut I just directed a project here that may want to utilize this token. Is there a possibility to add more projects into using BITCOINEX?

    • Robert Ross
    • Director of FoldingCoin Inc
    • Community Director for the Counterparty Foundation
    • Skype: foldingcoin
    • Twitter: @pooktwoFLDC
    • FLDC Twitter: @foldingcoin
    • Email: rross@foldingcoin.net
    • Alt Email: foldingcoin.net@gmail.com
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