Decentralized Exchange Bitsquare to be Released in Beta
Decentralized cryptocurrency exchange Bitsquare has announced launch of its beta platform on April 27. The project features absence of any intermediaries and transactions in a peer-to-peer network. The exchange will be presented in Barcelona at Fab Lab.
Cryptocurrency exchanging operations directly between users is a trader’s daydream, as it significantly reduces risks of an exchange freezing or even stealing money.
Notably, Bitsquare is a project developed by decentralization enthusiasts. Open source code of the exchange’s software client numbered 0.4.3 is available on GitHub for downloading and vulnerability audit.
“Bitsquare is not a company. It is an open source project aiming to organize as a Decentralized Autonomous Organization (DAO),” the platform’s website reads.
The project is led by Manfred Karrer, who had spent around two years developing the exchange. Open source code, institutional kind of the project, and p2p arrangement may seem a good solution at this phase. Users would be able to audit the code, while the exchange itself does not store user money, and does not act as an intermediary.
Centralized exchanges require much more trust, and, as seen in their bankruptcies happening every now and then, they imply serious risks.
Speaking of disadvantages inherent in existing markets, Karrer said:
“Exchanges provide a valuable service, as they are a bridge between Bitcoin and fiat currency, which is still very much needed. But it’s a double-edged sword: Virtually everyone who wants to use Bitcoin must go through these centralized and often strictly regulated companies, which makes them the effective gatekeepers of the system.”
In Karrer’s opinion, this state of things contradicts the very essence of bitcoin, which is decentralized by default. So the only way to reduce centralization is to create peer-to-peer infrastructure.
As seen from the scheme, cryptocurrency exchange would imply a small deposit to the tune of 0.1 BTC aimed to protect the network from spam attacks. However, the deposit is to be returned to user when transaction succeeds. Unfortunately, for now it is not quite clear whether both parties have to deposit BTC, or it may be other cryptocurrency or fiat money.
The service also implies fees to the tune of 0.0005 BTC for making a bid, and 0.001 BTC for accepting a bid. The fees are again seeking to prevent spam and market manipulations, and maintain the network’s functioning.
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