Having been in development for over two years, what promises to be the first decentralized Bitcoin exchange is set to officially open next Wednesday.
Bitsquare is an open source project headed by Austrian born Manfred Karrer, which allows anyone to trade Bitcoin for fiat currency as well as altcoins, without requiring a company, central intermediary or permission from anyone.
“Bitcoin’s reliance on centralized exchanges is diametrically opposed to its principles. I hope Bitsquare will solve that problem,” Karrer said.
Karrer began working on Bitsquare back when Bitcoin trading was mostly centralized in one big player; Mt. Gox. Today, long after the fall of Mt. Gox the trading ecosystem is significantly more diverse, Karrer thinks the heavy reliance on centralized exchanges is problematic.
“Exchanges provide a valuable service, as the are a bridge between Bitcoin and fiat currency, which is still very much needed,” Karrer explained. “But it’s a double edge sword. Virtually everyone who wants to use Bitcoin must o through these centralized and often strictly regulated companies, which makes them the effective gatekeepers of the system.”
He also believes this is a fundamental problem for Bitcoin. Of course, customers who store funds on these exchanges risk losing their bitcoins overnight, as