Launched last year, Bitsquare is the first decentralized bitcoin and altcoin exchange of its kind. Instead of trading bitcoin through a central intermediary as a typical exchange would, Bitsquare users connect through a peer-to-peer protocol and exchange money directly. To keep everyone honest, traders put up security deposits, while an arbitration system serves as a fallback.
The open-source project led by Manfred Karrer recently ran into a setback, however, as the team tried to register the Bitsquare trademark. Payment processor Square contends that the name Bitsquare is too close to their registered trademark and opposes the registration.
Rather than fighting to keep the name Bitsquare, the team behind the decentralized exchange decided it will pick a new name.
“We would have preferred to keep using the name Bitsquare, but we sought professional legal advice from two independent lawyers, and it appears the odds are stacked against us. Given that fact, we’ll focus our limited resources on improving the platform, rather than on a lengthy and expensive legal process,” Karrer told Bitcoin Magazine. “We’ll pick a new name.”
The Bitsquare team is currently asking the community for input on a new name on the Bitsquare forum. Karrer will personally award the person who comes up with the winning name — to be decided by the Bitsquare team — with 0.5 bitcoin.
Despite the slight setback, Bitsquare itself has been doing well, Karrer said. After a slow start in April of last year, volume on the decentralized exchange has increased organically over time. The number of successful trades on Bitsquare grows each month, with monero, the euro and the US dollar ranking as the most traded currencies. (All trades on Bitsquare happen against bitcoin.)
“We saw the biggest increase of users in times where centralized solutions were conspicuously failing,” Karrer explained. “Most notably, the Bitfinex hack seemed to be a clear signal to many people that their funds are not safe on centralized exchanges. Similarly, we saw an uptick around the The DAO debacle and the subsequent Ethereum hard fork, where centralized exchanges attempted to impose what the real Ethereum chain was on their users.”
Though, as Karrer noted, Bitsquare itself is still a work in progress as well. Volume on the decentralized exchange is still low compared to alternatives. And while rare, there have been some failed trades where arbitrators had to step in to reimburse funds, especially in the volatile altcoin markets. Future versions of Bitsquare will therefore include a more flexible deposit system, while the software will also be extended with APIs that can be linked, for example, to Bitcoin ATMs. For added security, integration with the Trezor hardware wallet is also in the works.
As an even more ambitious step in the development process, Karrer plans to turn Bitsquare into a decentralized autonomous organization (DAO) later this year. It is a tainted term since the Ethereum debacle carrying the same name, Karrer acknowledged, but he believes it to be a crucial step to ensure long-term sustainability of the project.
“Much like Bitcoin itself, it is important that Bitsquare has no single point of failure. Of course, the code is already open source, and the protocol peer-to-peer, but ideally management of the project would further decentralize over time as well,” he said.
For now, however, Bitsquare first needs a new name.