Komodo to Soon Release Atomic Swap-Enabled Trading App, CTO Reveals

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Cryptocurrency exchanges have been under fire so far this year, as hackers have kept on targeting them and other events hurt the confidence users have in certain platforms. Atomic swap technology is set to revolutionize the way we trade cryptocurrencies and more.

As CryptoGlobe covered, a Chainalysis report has found that 60% of cryptocurrency exchange hacks were the work of two major players, dubbed “Alpha” and “Beta.” Alpha was described as a “giant, tightly controlled organization partly driven by non-monetary goals” that appeared eager to “create havoc as to maximize profits.”

Beta, on the other hand, was described as a “less organized” player that focused more on monetary gains from their endeavors, moving money less, and waiting longer before cashing out. Together, these have reportedly stolen over $1 billion from exchanges.

Moreover, cryptocurrency exchange Cryptopia was hacked earlier this year in an attack described as “unusual” by Elementus, as it lasted longer than regular attacks, and saw hackers cash out over $2 million from decentralized exchanges.

On top of all this, crypto exchange QuadrigaCX recently went down after its founder and CEO Gerald Cotten unexpectedly passed away. Cotten was reportedly the only person with access to $145 million worth of customer funds in cold storage. The complex situation cost one crypto trader his $420,000 life savings, and is still unfolding.

While decentralized exchanges exist, their liquidity problems have seen most users stay away from them. The solution, peer-to-peer exchange, has trust-based risks, which are hard to fix without the transaction being made in person. This, as seen, carries risks.

Enter atomic swaps. This type of technology, according to the CTO of multi-chain platform Komodo (KMD),Kadan Stadelmann, can potentially revolutionize P2P transactions, as it eliminates the need the need for any central party.

This, he said, won’t make centralized cryptocurrency exchanges useless, as there’s room for both. CryptoGlobe caught up with Stadelmann to learn more about atomic swaps and Komodo itself.

CryptoGlobe: Can you introduce our audience to Komodo?

Kadan Stadelmann: Komodo itself is a blockchain platform that was founded a couple of years ago. Our vision is blockchain interoperability, the interconnectivity between different blockchain systems, between different communities, between different blockchain protocols, and also different technologies.

We have a varied set of different technologies and tools that together do reflect this vision that we have. As you maybe know we have decentralized exchanges, applications using blockchain technology, and some sort of smart contract system. As you can see it’s a pretty complex framework, and that basically is Komodo.

CG: Can you help us better understand atomic swaps?

KS: Sure. So there are different forms of atomic swaps, I'll just make it as abstract and as simple as possible. What I'm talking about now is the so-called "cross-chain atomic swap," this is basically the atomic swap everyone is talking about right now.

In simple terms an atomic swap would mean an exchange of coins from one person to another, without any central party involved. This is a direct line between me and you, so we can use the atomic swap protocol to exchange our tokens without any central technology. This cross-chain atomic swap is basically the idea of trading, exchanging something in a trustless way, with the help of specific mathematics and cryptography.

A cross-chain atomic swap can involve different blockchain protocols, so we can trade for example Ethereum for Bitcoin, and this trade takes place on our central computers - there's no central server like a centralized exchange. The most important aspect of this technology is that we're able to trade without anyone else involved, just me and you.

CG: What do you see in the technology's future? What potential applications can you imagine?

KS: I think this technology can cover a lot of things. Not just exchanging coins and tokens, but also exchange technology, exchanging information, and other data forms and data in general. I think atomic swaps - this technology of exchanging something in decentralized and trustless ways - opens door to the whole industry.

We're potentially talking about doctors exchanging information, Universities exchanging knowledge, making it a medium of exchange. These universities could use atomic swaps to exchange knowledge in a trustless way. I think for the technology the use cases are endless, as it's very promising.

Where I see it going is of course the financial area: trading, exchanges, etc. Those will be utilizing atomic swaps first. I see atomic swaps on smartphones, apps, and even on a smartwatch app. It's a mighty technology.

CG: Specifying cryptocurrency exchanges, how will atomic swaps affect them? Will they be an asset to them?

KS: I think it's going to definitely be an asset, something that's positive for the industry. We even see centralized exchanges developing decentralized exchange technology, take Binance for example - it's a centralized exchange building a decentralized exchange.

The biggest benefit of a decentralized exchange is the security, as trades just happen between me and you. It's very very different from a centralized exchange. I personally believe there will always be users who're familiar with the centralized exchange and will always feel more comfortable just opening a browser and entering an exchange this way. I think centralized and decentralized exchanges will likely co-exist for a couple of years, before we see hybrid forms get created.

CG: How will atomic swaps work with layer-two scaling solutions like Bitcoin's Lightning Network?

KS: [Atomic swaps] will be possible on layer-two scaling solutions, definitely, but they'll be a little bit different. Basically you would need some sort of gateway. Even though the coins are "locked" on the scaling solution, I believe atomic swap implementations could wait until the tokens arrive at the endpoint, exit the LN, and get unlocked again.

So if we did a trade and the LN was involved, it wouldn't be confirmed until the last steps were done - coins unlocked and tokens out of the second layer. We've developed something we call a trust API - while we're always trying building trustless systems we know normal users don't like to wait for confirmations, so in this case the system will allow a trade without the wait for the confirmation, or without waiting for the bitcoins to exit the LN.

I see other systems doing the same, so we would have an additional validation and confirmation layer allowing us to use the LN for atomic swapping. But it'll be different.

CG: When will Komodo's BarterDEX be live?

KS: Our decentralized exchange is live, publicly accessible, and already online. However, BarterDEX just entered the alpha testing stage two to three weeks ago and we're preparing for beta testing. We will make a public pre-release soon, however this is still a backend software, there is no graphical UI available right now.

We are planning to release a mobile solution - a smartphone trading application utilizing atomic swaps - later this year. A third-generation decentralized exchange.

CG: What's the Komodo token's role in all of this?

KS: We haven't really created Komodo as some sort of gas or fueling token for a decentralized exchange or any other technology. Our tech is 100% open and Komodo is the flagship token of the platform itself. The coin utilizes all the technologies we've built, and Komodo is more or less a "mothership," in the sense that it's the big spaceship where everything else - the other small projects - are created.

Komodo is like this big base foundation that we've laid for all the new tokens we see. We have dozens of blockchains being created with Komodo, that's its role. It's the glue that sticks dozens of projects, developers, and communities together and connects them while providing them a compatibility layer.

CG: Komodo hit a near $12 all-time high during the crypto market's peak, and now it's under $1, are you worried about its price performance, or the impact this may have on people's perspective into the market?

KS: To be honest I have no issue with the current market condition. While people say this was a really bad bear market, I think its normal as all coins are kind of pegged to bitcoin and if bitcoin goes down they all do.

At the end of the day 2018, the year everyone calls the worst crypto year, was the best one for me and every developer I know. We never had so much technology get created, we never had so many contracts and deals be made in the blockchain space. Although prices are down and Komodo along with it, the price to me is completely irrelevant. For me personally, it's irrelevant and the market should never be linked to the technology layer, they're two different things.

CG: Is there anything else you'd like to share with our audience?

KS: Yes, take a look at Komodo. It is a very promising technology, a young platform, and we've never really looked at the rest of the ecosystem as competition. If someone's following the media, we have security collaborations and vulnerability disclosure agreements.

Our big, big vision was to connect blockchain and provide this compatibility layer - and we've done it. We're open for other blockchains, users and developers to join.

Bitbond CEO Radoslav Albrecht Talks STOs, ICOs and Crypto Mass Adoption

Bitbond

One of the interesting applications of crypto and blockchain technology that is seeing actual use is business lending.

Bitbond is a company that offers business loans to small and medium-sized businesses using crypto. Based in Germany, Bitbond aims to tap into the enormous SME lending market, and sees blockchain as the means to do it.

We spoke with CEO Radoslav Albrecht about Bitbond, the future of STOs and ICOs, the regulatory landscape in Germany and what he thinks will pave the way for mass crypto adoption.

When did you get interested in crypto?

A good friend told me about Bitcoin in 2012, however, I didn't get into crypto until about a year later when I was researching efficient cross border payments.

What led you to create Bitbond?

As a consultant at Roland Berger, I was exposed to many different banking projects and quickly learned how inefficient lending processes were in the industry. This made me realise that there was huge potential for a platform like Bitbond that could automate much of the process while also reaching SMEs all over the world. Today we’re proud to provide financing in under 30 minutes making Bitbond perhaps the fastest way for a business to receive capital.

How do loans work via Bitbond?

Business owners apply for a loan through our borrower application. The application process is very simple. Entrepreneurs provide basic information about their business via an intuitive online application. This takes about 15 minutes and is done exclusively online.

Bitbond focuses on online / e-commerce sellers.  Businesses in this space typically sell on eBay, Amazon, Etsy, Shopify and many other large platforms. These have great APIs which we connect with in order to learn as much as possible about the health of the business.

Not only does this approach allow us to assess the creditworthiness of an SME very reliably, but it allows us to do our credit scoring very quickly. So if a borrower is approved he/she can receive funding in 24hrs after their application.

In terms of the technical side, we leverage blockchain technology for efficient cross-border payment processing and developed our own machine learning powered credit scoring algorithm.

What distinguishes Bitbond from other blockchain lending platforms?

Bitbond targets small business owners and aims to fill the 2 trillion dollar funding gap for SMEs.

Also, Bitbond is the first lending platform to service SMEs globally. This is great because we have a huge addressable market as a company. At the same time, we reach many business owners in remote locations who otherwise wouldn’t have access to capital. In order to make this happen, we need an efficient way to send money across borders.

When we launched Bitbond in 2013 we started by using bitcoin for payment processing. Today we primarily rely on EUR-denominated tokens that are issued on the Stellar blockchain. Stellar is more scalable and more cost efficient for our use case than bitcoin and by using the EURT we eliminate all foreign exchange risk versus the Euro.

Do you think “STOs” are the new “ICO”: Is the ICO model something you think the industry should move away from?

I think in the long run there is a place for both ICOs  and STOs. Crypto started with this anarchistic, decentralised community that was strongly influenced by the Cypherpunk community. STOs move away from this mentality and are a more regulated and less decentralised version, however, it is not a fundamental change in the industry and as I believe there is a place for both.

The ICO wave may have subsided but I believe it will return alongside STOs, both of these types of token sales just add to the innovation and diversity of the crypto landscape. Overall I feel STOs are complementary and not a replacement for ICOs and together they will push innovation in the blockchain space.

Do you think the mad bull run of 2017 and subsequent crash was a net positive or a net negative for the industry?​​​​​​

The bull run did an incredible job of introducing crypto to the mainstream. For example, recent studies show that 50% of American millennials are now interested in using crypto and millions of people own at least one type of coin.

Of course, the crash had a negative impact on the industry in the short term, but it also provided an important learning opportunity for entrepreneurs and investors who believed that prices would just keep going up.

Finally, I would say that crashes are inevitable in almost any industry, but it’s the recovery that is important. In the case of crypto, we’re now seeing much healthier growth and I would say that the bull run was a net positive as a result.

What obstacles do you see ahead before we can reach mass crypto adoption?

Crypto/blockchain is primarily an infrastructure technology, like Linux. Therefore it entirely depends on the use-cases that entrepreneurs and businesses develop on top of it. There are many excellent examples of tokens which have the potential to be used by the mainstream. I think our BB1 token is one example, and Brave’s BAT is another.

That being said there are some clear challenges ahead. The first one regards scalability and is probably the oldest problem in the blockchain industry. Bitcoin, Ethereum and many other popular tokens do not have the capacity to process a large volume of transactions. For the BB1 token, we chose Stellar which can reportedly process around 4,000 transactions per second - far more than the 7 that Bitcoin manages. Nevertheless, mainstream adoption would require closer to 40,000 transactions per second, so we still have work ahead of us.

Another important issue I’d like to touch on is usability. At Bitbond we’ve put a lot of time and effort into making our service as simple as possible. As crypto-natives it’s easy to forget how intimidating the jargon and hexadecimal strings can be to a beginner. In order to achieve adoption, we need to make the process of buying, selling and using crypto as intuitive as possible.

As a crypto company based in Germany, what’s your opinion of the German regulatory landscape?

Bitbond was the first BaFin regulated blockchain company in Germany. We received our licence in October 2016 and have been in continuous communication with the regulator since then.

We’ve been impressed with BaFin’s openness to new technology and have benefited from the guidance they have provided. The fact that our security prospectus was approved is a very encouraging sign to other crypto companies looking at alternative forms of fundraising.

With that in mind, I believe that the regulatory landscape is already good and getting better in Germany due to a high level of awareness about the space with lawmakers.

What’s on your roadmap for the rest of 2019?

Our goal is to make fast and affordable capital available to SMEs all over the world. Our STO will not only help us achieve this goal, but will also open up attractive interest rates to both retail and institutional lenders.

With regards to our roadmap for 2019, the first important step is the successful conclusion of our STO. Then we will begin paying BB1 holders on a quarterly and annual basis. Importantly, the Bitbond STO concludes in July, meaning that your readers need to act fast in order to receive payouts.

As a special offer, we’d like to share a unique discount code for CryptoGlobe readers. To receive a 5% discount, simply enter CC5BB1 during the checkout process. Do bear in mind the code is valid until the end of May.

The raised funds will be reinvested into SMEs all over the world. That means that BB1 holders not only receive smart passive income, but they also improve the lives of entrepreneurs living in some of the most disenfranchised places on earth.

The majority of the funds raised in the Bitbond STO are going towards funding loans originated on our platform. Some funds are being invested in activities such as growth and marketing to allow for Bitbond to reach more SMEs and fund more loans on Bitbond. This will help Bitbond increase its global presence and allow Bitbond to provide funding SMEs on a larger scale.

Therefore the funds raised in the STO will greatly determine our roadmap for 2019. However, the main goal is to scale up Bitbond and provide funding to more small businesses while giving our investors great stable and secure returns.

Stable and secure returns are uncommon terms in the token sale landscape. But this is where we think the Bitbond Security token offering can differentiate from other tokens as it can provide a real security based asset comparable to a bond, that anyone can invest in and be an investment that can be counted on to add to investors passive income year on year.

If you would like to ask me more questions about Bitbond and our STO,  we are hosting a live webinar with a question and answer session on Monday, 27th of May at 7 pm (CET). To join our webinar click this link.