How can I get a new Bitcoin exchange up and running?

I would like to have a Profit Points <-> Bitcoins exchange. The exchange could either be developed and run by contributors of Open-org.com or be created by an existing Bitcoin exchange. I have, however, already contacted World Bitcoin Exchange, to ask if they are interested in creating such an exchange without getting an answer. To develop the exchange ourselves seems like quite a task, due to the need for security even if we would base it upon the open source of the World Bitcoin Exchange.

The reason why I am so interested in creating a Bitcoin exchange is that the spirit of Bitcoins really match the spirit of Open-org.com. We both want to take on conservative systems and innovate to create something better. In the case of Open-org.com the main aim would be to create an alternative to the large established and utterly closed corporations, who feel like they own their employees.

David

Posted 2012-03-02T11:25:00.143

Reputation: 3 304

Why create Profit Points as its own unit? Why not use bitcoins natively? e.g., 10 profit points per BTC. The exchange rate to the USD would fluctuate but then you don't need an exchange. – Stephen Gornick – 2012-03-02T12:15:27.490

2@StephenGornick Excellent question. The point of Profit Points is that when someone contributes something to Open-org.com, new Profit Points are issued and given to the contributor. Conceptually, this will be the same as a company issuing more shares, to raise cash. Those that already own Profit Points will then own a smaller percentage of Profit Points, but the Profit Points should be more worth, since more work will have been done for the company. – David – 2012-03-02T12:33:40.470

1Depending on how willing you are to marry open-org with Bitcoin, you could consider issuing profit points at GLBSE. This way you can issue as many points as you want, and GLBSE will handle the trading between them and bitcoins, and the distribution of dividends. – Meni Rosenfeld – 2012-03-02T13:32:16.020

@meni I saw GLBSE earlier, and I really hope that I will not offend anyone, but it did not seem trustworthy enough. – David – 2012-03-02T17:58:46.457

1@David: Well, the operator of GLBSE is a trusted, veteran member of the Bitcoin community, whose real identity is known. GLBSE 2.0 is coming out which should solve some functionality shortcomings. – Meni Rosenfeld – 2012-03-03T17:39:38.450

@MeniRosenfeld I am glad to hear that the person behind is trust-worthy, and I will be keeping an eye out for GLBSE 2.0. – David – 2012-03-06T20:00:10.077

Answers

In order to have a functioning exchange, you will need buyers of your Profit points and for that kind of interest there will need to be dividends(best paid in BTC). GLBSE could be useful to you but you could also handle such trading by creating an exchange to establish value for the company.

I think your idea is fantastic and could revolutionize certain kinds of businesses. Given that you have a model of being able to pay members in points, it might make sense to set this as a high-priority project since it addresses the incentive folks have to get involved.

weex

Posted 2012-03-02T11:25:00.143

Reputation: 610

Excellent point. Getting a profit is certainly a high priority, we are currently working hard on creating a Minimum Viable Product for the paid Q&A site. We are, though, also focusing on getting a forum up and running, where contributors can give each other Profit Points by upvoting posts (just like one gets reputation points on a StackExchange) if someone contribute something valuable. – David – 2012-03-06T20:11:47.427

Another thought I had was about the supply of your Product points. Is there a fixed number of points? Who can issue them? Is there a schedule? – weex – 2012-03-07T08:15:01.700

There is not a fixed number of PPs. They will be issued in the same way that Reputation Points on this stack exchange are issued. I will use the LampCMS as a forum for discussing and submitting work so people can upvote each other and thereby give Profit Points.

– David – 2012-03-07T08:38:15.817

The easiest way to get a Bitcoin exchange up and running is to start with an open-source exchange project like Intersango and modify as appropriate to your target currency (Profit Points in this case).

As has been mentioned in the comments, however, GLBSE might actually be more appropriate to your intended use-case.

David Perry

Posted 2012-03-02T11:25:00.143

Reputation: 13 848

Your initial concern should not be with the technological aspect of a Bitcoin exchange, but with a legal one. You shouldn't aim to start a service that would in the end be deemed illegal in the countries you operate, or have servers in. There was a polish exchange that closed down as its owner didn't want to deal with potential gray areas of local law in regards to running such an exchange.

Then, you should keep in mind the business aspect of things - how will you get money in and out of your exchange and who you will be working with. There have been a couple exchanges like TradeHill that closed because of problems with money flow.

Only having such aspects covered should you deal with the software part of starting an exchange.

ThePiachu

Posted 2012-03-02T11:25:00.143

Reputation: 41 594

I agree with one needs to take care with regards to the legal aspects. I am not sure what you mean with money, there will be no other currencies involved other than Bitcoins, and of course Profit Points, but that is hardly a currency. – David – 2012-03-06T19:58:26.680

@David Well, then you have to consider how to move Profit Points and what potential problems you might encounter with that. It might be easier than using real currencies, but whoever created Profit Points might decide not to want to be associated with Bitcoins or the like (similarly to PayPal). I understand that in this particular case the concerns might be exaggerated, I generally aimed this answer to be a bit more broad than starting this particular exchange. – ThePiachu – 2012-03-07T05:58:56.657

In general, I agree with you, and I like that you consider my question to be a general one, thus requiring a general answer. In this particular case, the Profit Points are created by Open-org.com, so that should not be a problem. – David – 2012-03-07T08:40:17.220