Author: Peter Todd 2014-12-21 16:07:13
Published on: 2014-12-21T16:07:13+00:00
In this email thread, Jorge Timón discusses the advantages of proof-of-publication systems in trade scenarios. He provides an example of Alice, a seller who wants to sell 1 unit of A for 100 units of B and Bob, a buyer willing to pay up to 200 Bs for 1 A. In a proof of publication system, Alice publishes her order and Bob could publish his order at 200 Bs, which would execute at 150 Bs. However, after seeing Alice's order, he knows he doesn't need to pay that much, so he publishes an order buying for 100 Bs. This way, Alice gets 100 Bs, and Bob pays less than what he was willing to pay, making everyone happy. Jorge explains that it's not accurate to assume that the seller of an asset starts off with a specific price they want to sell it at and is happy no matter what happens or how it gets fulfilled. In reality, sellers and buyers want to know they're connected to actual sellers and buyers, and are willing to pay a premium for that. The concept of proof-of-publication makes these tradeoffs and options available and lets end-users pick the right one for their needs.Jorge also mentions that accurate unbiased price information is worth money, and in systems that allow third-parties to republish asset bids and offers, we'll even see third-parties republishing bids and offers from less secure systems to more secure systems to get better price discovery. He suggests that different mediums will become used for the proof-of-publication needed, ranging from directly on a major blockchain to minor/less secure blockchains like Bitmessage over treechains to centralized-but-audited proof-of-publication schemes - AKA centralized exchanges - to standard exchanges.
Updated on: 2023-06-09T14:59:46.322423+00:00