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AirSwap Leads the Rise of the Decentralized Cryptocurrency Exchange

AirSwap takes everything that makes the blockchain revolutionary — its high level of security, lack of a centralized authority, and low barrier to entry — and applies it to the trade of cryptocurrencies

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BY Tricia V. Morente - 11 Oct 2017

PHOTO CREDIT: Getty Images

 

Without a doubt, 2017 has been a pivotal year for blockchain technology. According to data from crypto information provider CoinDesk, over US$2 billion have been raised from initial coin offerings (ICOs) around the world. From a relatively modest $17 billion in January, the global cryptocurrency market cap has grown to US$126 billion.

Such staggering figures are leading Wall Street traders to turn their attention to cryptocurrency exchanges, with reports from The Wall Street Journal revealing that even firms like Goldman Sachs are weighing the creation of a new trading operation for digital currencies.

But here’s one thing curious about cryptocurrencies: For entities that are, at their core, decentralized, virtual currencies have so far only been traded in centralized exchanges.

What this means is that, like banks, existing major crypto exchanges like US$1.6 billion CoinBase are susceptible to security breaches, leaving investors worried about how cryptocurrencies are currently traded. There is a gap between what institutional investors expect in terms of financial market infrastructure and the Wild West nature of cryptocurrency trading.

AirSwap, a new peer-to-peer ethereum token exchange, seeks to address this by taking everything that makes the blockchain revolutionary — its high level of security, lack of a centralized authority, and low barrier to entry — and applying it to the trade of cryptocurrencies.

“AirSwap does not manage, or ever touch, user funds,” Michael Oved, founder of Airswap, tells Bloomberg. “AirSwap works simply as a software platform for discovery of peers with whom users can swap tokens on a peer-to-peer basis through ethereum smart contracts.” Oved adds that “there is no central exchange hub or clearinghouse; the transactions are negotiated peer-to-peer and then the swap is executed and cleared on the ethereum blockchain.”

Decentralized exchanges like AirSwap eliminate the need for a centralized authority from verifying and recording transactions the way a bank or middleman does. In doing so, customers transact directly with one another using an automated process, which eliminates the risk of security breaches, reduces service fees, and restores greater autonomy over an individual’s funds.

“AirSwap will bring the technology of decentralized peer-to-peer trading to the masses in Asia by providing a clean and easy user experience that will allow many people to join the platform in their native languages,” says Oved.

To get funding to create the exchange and finance further development, AirSwap created its own native token, AST, which was launched last October 10. The AirSwap token has already garnered early traction with US$20 million committed in presale. “We will sell up to a hard cap of US$35 million worth of tokens,” says Sam Tabar, AirSwap's strategist.