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SmartExchange: Decentralised Trustless Cryptocurrency Exchange

  • Filip AdamikEmail author
  • Sokol Kosta
Conference paper
Part of the Lecture Notes in Business Information Processing book series (LNBIP, volume 339)

Abstract

Trading cryptocurrency on current digital exchange platforms is a trust-based process, where the parties involved in the exchange have to fully trust the service provider. As it has been proven several times, this could lead to funds being stolen, either due to malicious service providers that simply disappear or due to hacks that these platforms might suffer. In this work, we propose and develop a decentralised exchange solution based on smart contracts running on the Ethereum network that is open, verifiable, and does not require trust. The platform enables two parties to trade different currencies, limited to Ethereum and Bitcoin in the current status of the system. A smart contract, deployed on the Ethereum blockchain, functions as an escrow, which holds a user’s funds until a verified transaction has been made by the other party. To make the smart contract able to detect a Bitcoin transfer, we implement our solution by utilising an oracle. We define the system architecture and implement a working platform, which we test in a model scenario, successfully exchanging Bitcoin and Ether on the blockchain test networks. We conclude the paper identifying possible challenges and threats to such a system.

Keywords

Cryptocurrency Distributed Exchange Blockchain Smart contract Oracle Ethereum Bitcoin 

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Copyright information

© Springer Nature Switzerland AG 2019

Authors and Affiliations

  1. 1.CMIAalborg University CopenhagenCopenhagenDenmark

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