The order book would quickly become a tragedy of the commons - everyone's free to add quotes to it, and doing so costs everyone else. In a perfect frictionless free market maybe exchanges could charge appropriately to put in an order, and rebate the proceeds to people who use the order book. But that's probably impractical (if nothing else, people would send their orders to other exchanges), and would create bad incentives; we'd lose the public good of the displayed, honest order book.
> If he could in fact not deliver the initial sales, then not only is it fraud, but it is a broken system that allows you to put up stuff for sale that you don't own.
Real world commerce works on trust and sometimes retroactive enforcement. If I order ten tons of timber, the world doesn't force the person selling it to prove they have it in stock, I just get to sue them if they don't deliver. Somehow it all manages to work out.
> If he could in fact not deliver the initial sales, then not only is it fraud, but it is a broken system that allows you to put up stuff for sale that you don't own.
Real world commerce works on trust and sometimes retroactive enforcement. If I order ten tons of timber, the world doesn't force the person selling it to prove they have it in stock, I just get to sue them if they don't deliver. Somehow it all manages to work out.