Exchanges are often criticized as a central point of failure of the cryptocurrency space. This isn’t without justification as, in recent years, we have seen a number of exchanges get hacked, robbed, or embezzled by their founders, which is far from insignificant. One proposed alternative are decentralized exchanges that would allow people make peer-to-peer trades using sophisticated smart contracts. However, there remains the fundamental challenge of interfacing with the legacy banking system.
Manfred Karrer joins us for a lengthy discussion on Bitsquare, a decentralized cryptocyrrency exchange which supports most fiat currencies and cryptocurrencies. Built to be a decentralized equivalent of LocalBitcoins, the Bitsquare client, which connects to the peer-to-peer network, uses Tor by default, which makes it almost completely anonymous. There are also a number of safeguards in place to eliminate the potential for fraud and theft, as well as an arbitration system to resolve disputes between traders.
Topics discussed in this episode include:
– The motivation behind Bitsquare
– The Bitsquare client and user experience
– A walkthrough of a typical trade
– The mechanics of the order book
– The fiat currency transfer mechanism
– The current and future arbitration process
– Manfred’s thoughts on DAOs
– Bitsquare’s product roadmap
Links mentioned in this episode:
– Bitsquare Website: http://bitsquare.io
– Bitsquare Whitepaper: https://bitsquare.io/bitsquare.pdf
– Risk Analysis: http://bitsquare.io/risk_analysis.pdf
– Arbitration System: http://bitsquare.io/arbitration_system.pdf
– Github Repo: https://github.com/bitsquare/bitsquare
Epicenter Bitcoin is hosted by Brian Fabian Crain, Sébastien Couture & Meher Roy.
Bitcoin is a Cryptocurrency that was released back in 2009 by pseudonymous developer Satoshi Nakamoto. Bitcoin uses peer-to-peer technology to operate with no central authority or banks, managing transactions and the issuing of bitcoins is carried out collectively by the network. The network is maintained by the miners that in return get rewarded with the currency. Bitcoin is open-source and its design is public, nobody owns or controls Bitcoin and everyone can take part. Through many of its unique properties, Bitcoin allows exciting uses that could not be covered by any of the older previous payment system like cash, cheque or credit cards.
Ethereum is a decentralized platform that runs smart contracts: applications that run exactly as programmed without any possibility of downtime, censorship, fraud or third party interference. In many ways Ethereum is how the internet was supposed to be. Free, open and uncensored. In some aspects it’s design is very similar to Bitcoin. Miners hash blocks of transactions and are rewarded in newly created Ether (ETH). On the other hand Ethereum is vastly different. That’s because Ethereum and it’s technology is a decentralized app platform for which money is merely one of the possible applications.
The DAO is a decentralized autonomous organization based on the Ethereum blockchain. The project was launched 30th of April 2016, with a 28-day DAO token crowd sale to fund the organization. The crowd sale set a new groundbreaking record as the most crowdfunded project in history with 12 million Ether, $150 million equivalent in USD gathered.The DAO token will be used as a measurements for voting on proposals set out by companies trying to get a piece of the The DAO fund. 1 DAO token = 1 vote (positive or negative) and will be the consensus mechanism as The DAO seeks to gain profit from the proposals put forward.