October 6, 2014 at 02:10Decentralized Exchange - Already Half a Year in Operation
Hello! Today I will tell you about a decentralized cryptocurrency exchange. That is, a technology with which you can trade directly with other users, without having to trust your funds to an intermediary exchange. Yes, it has already been implemented and has been working since April. It is called Asset Exchange.
It was a surprise for me to learn that even many cryptocurrency enthusiasts do not know about it, and that it has never been mentioned on Habré. While this is an interesting technology, and a rapidly growing financial market.
Many have heard about NXT. In short: this is not a fork of Bitcoin, but a separately written cryptocurrency that works on the principle of Proof-of-Stake. She’s been around for about a year, and I’ve talked about her in more detail almost a year ago. The NXT blockchain has already built many interesting features:
To trade on Asset Exchange, you only need an NXT wallet. All actions are performed directly in the official client. The currency in which all trades are made is NXT. Assets that are traded on an exchange are called Assets. That is, we sell and buy certain assets for NXT.
Asset is a debt obligation of the issuer that issued the asset. For example, I have a Sapp24 grocery store, and I intend to turn it into a chain of stores throughout the city. To do this, I decide to issue shares, and I will pay dividends on income to investors who have bought shares. So, I create an SAPP24 asset on the exchange and issue 10,000 units - this is like 10,000 shares of my store. I put them up for sale on the exchange at a price of 100 NXT for 1 SAPP24. Another user buys from me 50 SAPP24 for 5000 NXT - and I automatically receive my NXT, and he - my SAPP24 assets. Now they belong to him, this is recorded on the blockchain, and he can put them up for sale at a higher price or transfer them to another user.
Trading takes place according to the same algorithms as on the exchanges familiar to us. There is a queue of applications for the purchase of an asset - at prices lower than the current, and a queue of applications for sale - at prices higher than the current. Everyone can buy or sell an asset at the best price from the available applications or create their application by setting the price that he expects. When the next application “closes” the counter applications at a price, they are automatically executed.
Everything is stored in the blockchain: information about the created assets, operations for the purchase / sale / transfer of assets, applications for the sale / purchase of assets. All operations are conducted between users of the exchange directly. Thus, the exchange does not depend on the reliability of the central service, because it simply does not exist.
We go to nxtreporting.com - this is such a blockchain.info for NXT, and look at the list of existing assets. By default, they are sorted by trading volume. For example, now in the top:
And many others. New assets appear regularly, new markets grow like mushrooms. The daily trading volume already exceeds 1.2 million NXT, that is, about $ 27,000 at current rates.
We need an NXT client. I use Wesley's client, which is available here: nxtra.org/nxt-wallet
We can choose any other option on the official website of the NXT community: www.nxtcommunity.org/nxt-cryptocurrency/get-started-nxt Brainwallet
technology is used in NXT clients. Your private access key is completely represented by one long and strong passphrase. To create a wallet, just think up and enter a long passphrase that no one can guess or pick up. For this passphrase, you will enter your account and confirm your operations to it. You don’t need a wallet file, and the only way to lose your wallet is to forget the passphrase.
They recommend doing so. We take the quote we know or another set of 5-10 or more words, which is easy for us to remember forever. Then we change some words, letters or symbols in this phrase in an illogical way so that your password is not picked up by this most famous phrase. And we add a small password of random characters to the resulting phrase to finally level out any chance that the password can be picked up.
My password is a quote from a book consisting of 7 words, one of which is replaced by an unexpected one, they are typed on Russian keys in the English layout without spaces, and at the end a 9-character password is added from random Latin letters and numbers. It is safe enough.
When the client starts, you will need to wait for the blockchain to load. Nothing new here: the same thing happens with the official Bitcoin client. When the client starts, we can see our NXT address from the top left.
Here, for example, mine is: NXT-MCPE-JZ9C-7EDH-84Y9Q
This is the address to which you can transfer NXT from the exchange, and they will be on your account. For more information about your address, click on the “More info” button under “Account Balance”:
There are several options. You can buy NXT for bitcoins on the exchanges:
bter.com/trade/nxt_btc
dgex.com/ex11/#/exchange/DGEX/BTC/NXT
www.cryptsy.com/markets/view/159
You can also buy NXT for bter and cryptsy for USD and for CNY.
You can immediately get BTC assets (mgwBTC) through Multigateway: multigateway.org
Detailed instructions on their website: multigateway.org/user-guide You
will need to install the extension for the official client. There is nothing to worry about.
In the NXT wallet, go to the Asset Exchange section in the menu on the left:
Click the Add Asset button from the top right:
And enter the asset ID that we want to buy.
For example, if we looked at the information about the mgwBTC asset on the nxtreporting website and decided that we want to buy bitcoins through a decentralized exchange for NXT, here is our Asset ID: 4551058913252105307 Enter
it: We
get to the page with the information about the asset and can already trade it.
The exchange’s interface is familiar - there is a “glass” of buy and sell orders, and I can place my order at the desired price.
For example, I want to buy a little mgwBTC: I
confirm the application with my password:
All! The application has gone online, and soon I will receive my assets. And in the case of mgwBTC , for example, I can output them to real bitcoins through the automatic Multigateway.
The time it takes for an application to go online is usually about a minute. This is the time for which the closest block in the blockchain is generated - our application falls into this block.
The assets that we have can be seen in the My Assets section:
There, as you can see, there is a Transfer button that allows you to transfer assets to another user.
The Open Orders tab shows all my current requests for the purchase / sale of assets:
To do this, we click the bottom button in the Asset Exchange - Issue Asset section.
Enter the name, fill out the description. We enter the number of assets that we issue. We indicate to which decimal place they can be divided. For example, I entered 1 in the Decimals field - one decimal place. That is, it will be possible to buy, for example, 0.3 SAPP24.
The minimum commission for creating an asset is 1000 NXT. Yes, that's a lot. In order not to clog the network with thousands of useless assets, such a filter has been introduced. Having demonstrated the seriousness of our intentions, we pay this commission, and it is received by the one who will generate the corresponding block in the blockchain.
Enter the password, click Issue Asset, you're done.
Now we go to the forums and tell everyone about our wonderful undertaking, give our Asset ID, attract people to our IPO and wait for our asset to fly to the top in terms of trading volume.
I hope that I was able to introduce a little habrachitetel in the course of things. It has already turned out quite voluminously, although I touched on the topic only superficially. Ask questions, I will try to clarify that I can.
It was a surprise for me to learn that even many cryptocurrency enthusiasts do not know about it, and that it has never been mentioned on Habré. While this is an interesting technology, and a rapidly growing financial market.
Many have heard about NXT. In short: this is not a fork of Bitcoin, but a separately written cryptocurrency that works on the principle of Proof-of-Stake. She’s been around for about a year, and I’ve talked about her in more detail almost a year ago. The NXT blockchain has already built many interesting features:
- Alias - an analogue of the idea of Namecoin;
- You can send and receive encrypted messages to the NXT address directly in the client;
- Asset Exchange - a decentralized asset exchange, which I will talk about today;
- and even the Digital Good Store is a decentralized marketplace, which I will talk about in another article.
To trade on Asset Exchange, you only need an NXT wallet. All actions are performed directly in the official client. The currency in which all trades are made is NXT. Assets that are traded on an exchange are called Assets. That is, we sell and buy certain assets for NXT.
How it works?
Asset is a debt obligation of the issuer that issued the asset. For example, I have a Sapp24 grocery store, and I intend to turn it into a chain of stores throughout the city. To do this, I decide to issue shares, and I will pay dividends on income to investors who have bought shares. So, I create an SAPP24 asset on the exchange and issue 10,000 units - this is like 10,000 shares of my store. I put them up for sale on the exchange at a price of 100 NXT for 1 SAPP24. Another user buys from me 50 SAPP24 for 5000 NXT - and I automatically receive my NXT, and he - my SAPP24 assets. Now they belong to him, this is recorded on the blockchain, and he can put them up for sale at a higher price or transfer them to another user.
Trading takes place according to the same algorithms as on the exchanges familiar to us. There is a queue of applications for the purchase of an asset - at prices lower than the current, and a queue of applications for sale - at prices higher than the current. Everyone can buy or sell an asset at the best price from the available applications or create their application by setting the price that he expects. When the next application “closes” the counter applications at a price, they are automatically executed.
Everything is stored in the blockchain: information about the created assets, operations for the purchase / sale / transfer of assets, applications for the sale / purchase of assets. All operations are conducted between users of the exchange directly. Thus, the exchange does not depend on the reliability of the central service, because it simply does not exist.
What can I already trade?
We go to nxtreporting.com - this is such a blockchain.info for NXT, and look at the list of existing assets. By default, they are sorted by trading volume. For example, now in the top:
- TOKEN are assets of SuperNET, a jl777 project, an active NXT developer;
- Jinn - shares of some ternary logic hardware project;
- mgwBTC is the BTC asset of an automatic gateway called Multigateway - that is, you can actually sell and buy real BTC for NXT on a decentralized exchange;
- NEMstake - assets of the NEM project, an alternative cryptocurrency with its own innovations - in fact, this is a pre-sale of their cryptocurrency, which will eventually be distributed to NEMstake holders after the release;
- Nxttycoin - represents the official cryptocurrency of the company Nxt Mobile Applications, which is developing the Nxtty encrypted messenger.
And many others. New assets appear regularly, new markets grow like mushrooms. The daily trading volume already exceeds 1.2 million NXT, that is, about $ 27,000 at current rates.
I want to try it! What to do?
1. We get an NXT wallet
We need an NXT client. I use Wesley's client, which is available here: nxtra.org/nxt-wallet
We can choose any other option on the official website of the NXT community: www.nxtcommunity.org/nxt-cryptocurrency/get-started-nxt Brainwallet
technology is used in NXT clients. Your private access key is completely represented by one long and strong passphrase. To create a wallet, just think up and enter a long passphrase that no one can guess or pick up. For this passphrase, you will enter your account and confirm your operations to it. You don’t need a wallet file, and the only way to lose your wallet is to forget the passphrase.
How to come up with a good passphrase?
They recommend doing so. We take the quote we know or another set of 5-10 or more words, which is easy for us to remember forever. Then we change some words, letters or symbols in this phrase in an illogical way so that your password is not picked up by this most famous phrase. And we add a small password of random characters to the resulting phrase to finally level out any chance that the password can be picked up.
My password is a quote from a book consisting of 7 words, one of which is replaced by an unexpected one, they are typed on Russian keys in the English layout without spaces, and at the end a 9-character password is added from random Latin letters and numbers. It is safe enough.
When the client starts, you will need to wait for the blockchain to load. Nothing new here: the same thing happens with the official Bitcoin client. When the client starts, we can see our NXT address from the top left.
Here, for example, mine is: NXT-MCPE-JZ9C-7EDH-84Y9Q
This is the address to which you can transfer NXT from the exchange, and they will be on your account. For more information about your address, click on the “More info” button under “Account Balance”:
2. We deposit funds into the wallet
There are several options. You can buy NXT for bitcoins on the exchanges:
bter.com/trade/nxt_btc
dgex.com/ex11/#/exchange/DGEX/BTC/NXT
www.cryptsy.com/markets/view/159
You can also buy NXT for bter and cryptsy for USD and for CNY.
You can immediately get BTC assets (mgwBTC) through Multigateway: multigateway.org
Detailed instructions on their website: multigateway.org/user-guide You
will need to install the extension for the official client. There is nothing to worry about.
3. Let's trade!
In the NXT wallet, go to the Asset Exchange section in the menu on the left:
Click the Add Asset button from the top right:
And enter the asset ID that we want to buy.
For example, if we looked at the information about the mgwBTC asset on the nxtreporting website and decided that we want to buy bitcoins through a decentralized exchange for NXT, here is our Asset ID: 4551058913252105307 Enter
it: We
get to the page with the information about the asset and can already trade it.
The exchange’s interface is familiar - there is a “glass” of buy and sell orders, and I can place my order at the desired price.
For example, I want to buy a little mgwBTC: I
confirm the application with my password:
All! The application has gone online, and soon I will receive my assets. And in the case of mgwBTC , for example, I can output them to real bitcoins through the automatic Multigateway.
The time it takes for an application to go online is usually about a minute. This is the time for which the closest block in the blockchain is generated - our application falls into this block.
The assets that we have can be seen in the My Assets section:
There, as you can see, there is a Transfer button that allows you to transfer assets to another user.
The Open Orders tab shows all my current requests for the purchase / sale of assets:
How to create your own asset?
To do this, we click the bottom button in the Asset Exchange - Issue Asset section.
Enter the name, fill out the description. We enter the number of assets that we issue. We indicate to which decimal place they can be divided. For example, I entered 1 in the Decimals field - one decimal place. That is, it will be possible to buy, for example, 0.3 SAPP24.
The minimum commission for creating an asset is 1000 NXT. Yes, that's a lot. In order not to clog the network with thousands of useless assets, such a filter has been introduced. Having demonstrated the seriousness of our intentions, we pay this commission, and it is received by the one who will generate the corresponding block in the blockchain.
Enter the password, click Issue Asset, you're done.
Now we go to the forums and tell everyone about our wonderful undertaking, give our Asset ID, attract people to our IPO and wait for our asset to fly to the top in terms of trading volume.
I hope that I was able to introduce a little habrachitetel in the course of things. It has already turned out quite voluminously, although I touched on the topic only superficially. Ask questions, I will try to clarify that I can.