One concern with this activity is cybersecurity, given that central exchanges are a target for hackers. It has been estimated that since 2011, some $3 billion has been stolen from exchanges, based on data collated by Crypto Aware.
Altcoin.io aims to tackle this concern by developing a peer-to-peer, trustless, and decentralized exchange. Here the concept is that users will retain control of their tokens, without ever relinquishing them to a third party.
Altcoin.io will seek to have its trading as a real-time and scalable operation, running at a lower cost than other established centralized exchanges. This vision is set out by the company’s CEO and Co-Founder, Andrew Gazdecki, who states: “The team and I are really excited about building an exchange where you can trade securely, staying in complete control of your tokens at all times. Altcoin.io combines the safety of decentralization with the speed and useability of a centralized exchange, which we believe is the next evolution of cryptocurrency trading.”
To overcome cybersecurity issues, Altcoin.io are developing a sidechain model for the decentralized exchange. This is called ‘plasma’, and it is the basis for a scalable, hierarchical blockchain where transactions are underwritten by smart contracts. With this approach, should a system failure or a security breach occur, users can trigger a mass exit event to release their funds from the smart contract.
Gazdecki co-founded Altcoin.io with Sulejman Sarajlija in 2017. The company has developed an exchange of Bitcoin for Ethereum using atomic swap technology. This allows for the exchange of one cryptocurrency for another cryptocurrency without the need for a trusted third party.
Atomic swaps use Hash Timelock Contracts (HTLC). HTLC is a time-bound smart contract between parties that involves the generation of a cryptographic hash function, which can be verified between them.