September 2019 was a transformative month for Hodl Hodl. During the Baltic Honeybadger conference, the exchange’s co-founders Max Keidun and Roman Snitko announced the open sourcing of their project, alongside a public release of their escrow API. These two major decisions marked a departure from their former business model in order to embrace a whole new world of ingenuity and innovation. Through this 180-degree turn, the entire project becomes more cypherpunk and more open to potentially great innovation.
In this exclusive Bitcoin Magazine video interview, Hodl Hodl CEO Max Keidun explains both the pragmatic and the idealistic considerations which led to the decision to take a step back from exchange management in order to focus on writing code and consulting other projects. Furthermore, the co-founder talks about the various use cases for the soon-to-be open-sourced API, and why it’s important to provide useful tools to a greater number of actors — as opposed to trying to avoid regulators all on your own.
Why Hodl Hodl Is Going Open Source
In a recent blog post by the Hodl Hodl team, they explain that anyone will be able to run their own peer-to-peer bitcoin exchange “under their own name and from their own server.” In a world where regulators constantly crack down on everything that doesn’t comply with KYC/AML requirements, open sourcing appears to be a wise move. While it may dilute and cannibalize the Hodl Hodl brand, it definitely brings more freedom to bitcoiners who want to do privacy-friendly swaps between BTC and altcoins or fiat currencies. Nation states can collaborate to shut down a particular business, but they can’t take down code that anyone can run on their home computer.
As Snitko told Bitcoin Magazine, “With exchange project being open source, we'll be earning money by licensing it (open source does not mean free to use) to exchange operators. We will no longer run the exchange, but only write code.”
The HodlHodl API
As acknowledged by Keidun in a witty metaphor, the API is like a video game engine which allows any enthusiast to build their own digital universe without needing to learn how to write code. It’s a solid foundation that anyone can use to create an OTC desk, a prediction market, a peer-to-peer betting market, a gaming payment solution which facilitates swaps for virtual in-game currencies or even a service market for freelancers (such as Fiverr or Upwork).
All of these would benefit from a customizable multisig escrow system and full support for Bitcoin and Lightning. Also, the user interface is already embedded in the package, so businesses should only worry about adapting the Hodl Hodl software to suit their needs.
Co-founders Keidun and Snitko will follow the Eric Hughes mantra which states that “cypherpunks write code” and are, therefore, committed to not holding any keys in their clients’ multisig structure. This means that Hodl Hodl will not have any kind of control over the projects that get advised by the company, and the users of the API are free to make any kind of decisions that they desire.
For more information about the considerations which led to this radical yet potentially beneficial shift in Hodl Hodl’s approach, watch the video interview above.