Subject: Re: [bitcoin-dev] BIP clearing house addresses

From: Tier Nolan <[email-masked]>
Date: Mon, 8 Aug 2016 12:01:57 +0100

With channels and the exchange acting as hub, you can do instant trades
between altcoins.

This doesn't work with fiat accounts.  A "100% reserve" company could issue
fiat tokens.  The exchange could then trade those tokens.

This eliminates the counter-party risk for the exchange.  If the exchange
dies, you still have your (alt)coins and also fiat tokens.

There is still risk that the token company could go bankrupt though.  This
could be mitigated by that company requiring only "cashing out" tokens to
accounts which have been verified.

The company could set up a blockchain where it signed the blocks rather
than mining and could get money from transaction fees and also minting fees
(say it charges 1% for minting new tokens)

I wonder what how the law would work for that.  It isn't actually doing
trading, it is just issuing tokens and redeeming them.