Coinffeine, the world’s first decentralized, peer-to-peer (p2p) bitcoin exchange, officially launched today in over 70 countries.
The exchange received an investment of undisclosed size last November from Bankinter Innovation Foundation, the venture capital arm of Bankinter, one of Spain’s largest banks. Since then, it had been in a ‘technical preview stage.’
In a market saturated with bitcoin exchanges, Coinffeine employs a radically different model. The exchange is not a website, rather software downloaded to your computer, from which trading is conducted p2p.
Whereas conventional exchanges also function as a third party entrusted with client funds, no deposits or withdrawals are made on Coinffeine. Instead, transactions are enforced by a ‘Micropayment Channel’, which leverages temporary collateral to force users to comply with the terms of their deal.
User funds are thus not susceptible to the exchange’s collapse, insolvency or hacking. In addition, the theme of decentralization fits well with that of digital currency and the ideology of much of its community.
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CEO Alberto Gómez Toribio explained:
“Not having to identify users or enforce KYC laws has allowed us to design a much more scalable exchange model. But what is even more interesting, is the user experience we offer. Coinffeine is like BitTorrent. You just download it, you connect your OKPAY account, or PayPal in the future, and use it.”
The exchange has been said to combine the trader experience of conventional exchanges and the simplicity of p2p channels such as Localbitcoins.
Initially, no fees will be charged for trades. Also, OKPay will be the only supported fiat payment method. Planned additions for the future include PayPal.
Only bitcoin to fiat exchanges will be enabled at first. Two-way trading and crypto-to-crypto exchanges will be added at a later stage.
The project is open source, and the exchange has invited the community to contribute.