Bitsquare.io The Decentralised Bitcoin Exchange

A mind is like a parachute, 
It doesn't work if it's not open.
Anonymous

Exchanges play a critical role in the bitcoin ecosystem. Without them, it would be nearly impossible to buy or sell bitcoins for euros, dollars, yen or yuan. Bitcoin would be a market without liquidity; bitcoin would be worthless.

Satoshi Nakamoto created Bitcoin with the motivation to solve the problems of centralized payment systems so it seems inconsistent that centralized Bitcoin exchanges are still the primary way to acquire bitcoins. In our opinion the dominance and vulnerability of centralized exchanges is the Achilles heel in the current Bitcoin ecosystem.

There have been many discussions in the forums about how to build a pure P2P based solution but there is still no real decentralized bitcoin exchange available yet.

That’s where Bitsquare comes in.

Manfred Karrer has developed a solution which is based on pure P2P infrastructure. While the transfer of national currency requires the involvement of traditional payment channels like banks or payment processors, we are not dependent on any particular one. Their role is limited to what it should be: They transfer national currency. No power of censoring, confiscating, monitoring or controlling your financial interaction.

To keep reading about the Philosophy of Bitsquare, and how we solve the involved challenges to make it secure and easy to use please read our White Paper:

» Download the Bitsquare White Paper

Is Bitsquare safe and Open Source?

Yes, Bitsquare is open source and licensed under Version 3 of the GNU Affero General Public License. Here’s the source code and license.

And yes, Bitsquare is safe. There are several reasons for this. First, using Bitsquare doesn’t require you to submit personally identifying information, so no data about you can get hacked. Next, Bitsquare employs three technical mechanisms of protection:

1. All bitcoins traded with Bitsquare are secured in a 2-of-3 multisignature address.

2. Both traders are required to pay security deposits. These are refunded to them after a trade completes.

3. Bitsquare features a decentralized and open arbitrator system, to be used in case a trade dispute arises.

There are already other decentralized exchanges. How is Bitsquare different?

Currently no other project fits our definition of a decentralized Bitcoin exchange. (Open Bazaar and BitMarkets stand alone in mirroring Bitsquare’s principles, but they’re full market places, not specialized currency exchanges.)

To be properly decentralized, one must avoid single points of failure:

• Bitsquare does not hold any bitcoins. All are held in multisignature addresses rather than a Bitsquare-controlled wallet.
• Bitsquare does not hold any national currency. National currency is transferred directly from one trader to the other.
• Bitsquare uses a Peer-to-Peer network over Tor. This means there are no servers to be hacked or DDoS’d.
• Bitsquare does not know the traders. No data is stored on who trades with whom.
• Bitsquare does not require registration. This means privacy is maintained, there are no “approval” wait times, and identity theft becomes impossible.
• Bitsquare does not operate its arbitration system – traders themselves choose from an open and decentralized market of arbitrators.
• Bitsquare is not a company. It is an open source project aiming to organize as a Decentralized Autonomous Organization (DAO).
• Bitsquare is self-funded by the efforts of its volunteers and contributions of donors.

please

Bitcoin and Blockchain Will Help Africa Achieve Global Inclusiveness, Says Kenyan Blockchain Incubator Founder

David McGlauflin

Space Kenya Networks Limited,  a Kenyan web development company, recently announced the launch of its blockchain incubator BitHub. CCN spoke with the director of Space Networks Kenya and founder of BitHub to discuss the crypto- and bitcoin-space in Kenya. 

In a statement found on the  website, BitHub describes its mission as: “Solving problems using innovative Blockchain solutions that are currently under development across the World.” Furthermore, the company says:” We believe that blockchain solutions will make substantial contributions to rethinking existing structures in the following political, social and economic sectors.”  The company aims to “Bring together a consortium of individuals, organizations, and expertise to drive the development and adoption of blockchaintechnologies especially within the African continent,”

Space Networks Kenya Limited is based in Nairobi, Kenya. The company describes itself as an I.T. solutions company specializing in Internet Services and software solutions. Space Networks Kenya has been in business since 2010 and has managed several startups including:

• Whive.com – A social media marketing company.
• Crowdpesa.com – This provides M-Commerce services to businesses in Kenya.
• Spacekenya.net – Provides domain and hosting services.

This is the company’s first Blockchain-based startup and, expectations are high for its startup BitHub. The organization will attempt to work with bitcoin startups in varying fields including Legal, Government, I.O.T., Finance, Security, Biotech, Software Security, and many other industries.

John Karanja is the founder of BitHub Africa a Blockchain Accelerator providing Consultancy and Incubation services for individuals and firms interested in Bitcoin and Blockchain Technology. He is also a Director at Space Kenya Networks Ltd which is a company he co-founded in 2008 that provides a workspace for businesses and startups operating in Nairobi. Space Kenya has been awarded the Vision2030 ICT Award 2011 for Innovation in Youth and Gender Sector by the Kenyan Government.

John, Kenya seems ripe for crypto development you have Bitpesa which is trying to become a major payment network and now BitHub which is going to provide block chain solutions for a host of industries. Why have you decided to enter into the blockchain industry?

Well, we are simply providing education about the blockchain technology and opportunities for streamlining existing services or providing services where they don’t exist. As you know blockchain technologies are trustless and, therefore, will enhance accountability and efficiency.

So, in addition to providing services, your company will set out to educate business on how they could use the blockchain.

We will in the first instance provide consultation and incubation services. We will not build blockchain tech but advocate for solutions we find relevant for the African context. We also hope to spur others to create homegrown solutions but I believe this we be more of organic growth.

Can you give us more info on BitHub, like goals or current projects?

We just launched applications last week. We will make a decision on the startup by the end of February. We are most excited about solutions in the security space as that is a big issue.

Like, cyber security? For the internet?

Yes, but bitcoin related.

Can you give me more details?

Well. A lot of devices in Kenya run unlicensed or cloned software. Malware is a big problem. As you can imagine we cannot run or build bitcoin software in an environment where we cannot trust the operating systems being used. Thus starting with securing blockchain infrastructure will be critical for growth. This, by the way, is a huge problem globally as well.

That kinda sounds like a big deal can you talk more about it?

This is in an interesting area. How do we prevent an organization’s tokens, for example, bitcoins [from] being stolen by malware.

Wow! This could be a big commercial application, not only for Africa but all users. I myself have fallen victim and have been robbed. I think you’re on to something.

Yes, we want to focus on this area. We believe Kenya has the talent to make this happen, we will support the team that tackles this huge problem.

Your government has been less than friendly to other crypto start-ups in the past.  Do you think the government of Kenya will be a hurdle to overcome?

I am not worried.  I think Kenyan Regulators, in particular, the Central Bank should take time to assess the potential of Blockchain technology to reduce costs and enhance transparency within multiple sectors of the economy. For example blockchain technology could provide mechanisms to seal corruption loopholes and track illegal activity such as money laundering at very low costs.

Finally, I want to give you an opportunity to say whatever you want. An open microphone.  What do you want the world to know?

I think Bitcoin and Blockchain will finally give the people of Africa a chance to extract and exchange value from their many talents. Africa has a lot to offer the World and Satoshi’s innovation brings us closer to achieving the dream of global inclusiveness.