Spanish Bitcoin startup Coinffeine has launched the world’s first decentralized Bitcoin exchange platform in more than 70 countries, including Russia, China, Indonesia and Brazil.
The company, which started offering a technical preview of their platform in May, was funded by the Spanish bank Bankinter through the Bankinter Innovation Foundation in November.
The Coinffeine platform is still in beta, and the company recommends exchanging only moderate amounts of money through the platform until further notice.
The founders describe Coinffeine as “BitTorrent for Bitcoin,” a decentralized exchange based on peer-to-peer operations.
“Coinffeine is completely distributed, just like BitTorrent,” notes the Coinffeine website. “The exchange is done peer-to-peer (P2P), so there is only a very limited disclosure of information (your payment processor account so the money can be transferred) with the person you are doing the exchange. You are always in control of your bitcoins, and your trusted payment processor of choice is in control of your local currency.”
Coinffeine CEO Alberto Gómez Toribio said that using Coinffeine is as simple as using LocalBitcoins, but as powerful as using Coinbase or BitStamp. “We want our customers to be those who simply have a PayPal-like account and want to buy or sell bitcoins in a simple and effective way,” he said.
Major exchanges such as Coinbase and Bitstamp work just fine and, after the first turbulent years with massive failures like Mt. Gox, many of today’s bitcoin exchanges are solid, responsible and professional businesses. However, banks have been rumored to monitor transactions to and from bitcoin exchanges, and report them to the government under instructions from the authorities.
Only a few weeks ago, a memo received by a bank in Europe from the national financial institute was disclosed, with instructions to report anyone who receives more than €1,000 that may be linked to bitcoin. That’s likely to annoy those who are paid in bitcoin (for perfectly legitimate work) and must cash out to pay bills and buy food.
It’s very easy to imagine how a possible surge of anti-bitcoin sentiment in public administrations may force banks to reject any transactions to or from bitcoin exchanges. In that case, bitcoin users would have to find alternative means to buy and sell bitcoin, and Coinffeine’s P2P exchange system could be one of the best options.
Coinffeine works like traditional exchanges, but using external payment processors – such as PayPal or local processors – to manage funds in local currencies, and a desktop application to manage bitcoin. The P2P Coinffeine system works without requiring the company to hold user deposits in bitcoin or local currencies. Therefore, Coinffeine doesn’t have to identify users or take costly measures to comply with anti-money laundering (AML) regulations in each country.
“Not having to identify users or enforce KYC (know-your-customer) laws has allowed us to design a much more scalable exchange model,” said Gómez. “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.”
While only Okpay is supported at the moment, Coinffeine expects to integrate other payment processors in the near future.