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ASAIK, most of the bitcoin exchanges don't push all the transaction to the public, on-block. This is due to bitcoin speed limitations and fees.

Does Ethereum have similar limits or do Ethereum exchanges push transactions to the public?

  • Could you clarify what you mean by Bitcoin exchanges not pushing public transactions or provide a source? – user9402 Jun 11 '17 at 16:25
  • @Eric example www.coindesk.com/block-chain-transactions-bad-bitcoin/ – twoface88 Jun 11 '17 at 16:26
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I feel like this is more of an economics question than a question strictly about Ethereum, but it's definitely interesting.

The idea of private exchanges of value or "I owe yous" is a problem that will plague any kind of asset that can't be traded in real-time.

Take gold for example. There are more certificates for gold bullion that have been privately traded than there is physical gold on the planet. Even moreso than could possibly be mined on planet Earth in the near future.

Granted, there is a benefit for allowing private transactions for the trader, as they can trade with higher liquidity. But in my personal opinion whatever exchange is enabling that sort of off-chain transfer is asking for trouble. I mean at that point it's not much different than a government printing more money to pay its own debts.

But I'm not an economist, so back to the issue at hand.

According to https://ethstats.net/, the average block time on the Ethereum network is only about 15 seconds. Compare this to Bitcoin's block time of 10+ minutes.

So because Ethereum transactions settle faster, the need for off-chain transactions is presumably less than with Bitcoin. However, if someone can make a profit within that 15 second window by conducting transactions off-chain then they will.

I think the key difference here is that Ethereum transactions are closer to real-time than Bitcoin transactions are, and therefore there is less of an incentive to assume the risks of off-chain trading, both for the exchanges and for the traders.

Really interesting question though, +1!

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