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Exchange hacks have plagued Crypto markets since the infamous hack of Mt.Gox in 2014, which triggered a 2-year bear market. At the time, 850,000 Bitcoins were stolen at a value of over $450m, though today that would be over $8bn. Since then, other notable hacks have included the $72m stolen from Bitfinex, and $500m of NEM stolen from Coincheck, so far, the largest hack to date.

These crypto honeypots present an attractive opportunity for skilled hackers and probably the most significant fear for exchange operators. Users are at risk too, Buyers and sellers have to balance the convenience of holding coins on an exchange with the risk of a hack. Often, once a hack has been made public, you will see a flurry of Twitter posts saying "This is why you shouldn't keep your coins on an exchange."

The nature of exchange risk has led to the emergence of decentralised exchanges, such as EtherDelta, IDEX and 0x. And while not a true exchange, the team will explain they are a marketplace, Airswap has thrown its hat into the ring with the launch of their platform.

In this interview, I talk with Don Mosites, the engineering side of the co-founding team about the launch of the platform and the challenges they face with security, liquidity and market maker pricing.

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SHOW NOTES

• Connect with Don:

  • Twitter @dmosites

  • Medium

  • AngelList
     

• Airswap:

  • https://www.airswap.io/
     

• Interviews with Don:

  • nblocked Events: Tokenization and ICOs: An Interview with Don Mosites, Swap Protocol

  • YouTube: Swap Protocol Interview with Don Mosites and Michael Oved
     

• Exchange Hacks:

  • Mt.Gox

  • Blockgeeks: 5 High Profile Cryptocurrency Hacks

  • Fortune: How to Steal $500 Million in Cryptocurrency

  • Bitfinex
     

• Decentralised Exchanges:

  • Hackernoon: Understanding Decentralized Exchanges

  • The Market Mogul: How Decentralised Exchanges Can Prevent Crypto-Exchange Hackers

  • The Mission: Decentralized Cryptocurrency Exchanges: A Comprehensive Overview
     

BREAKDOWN OF THE SHOW

00:04:47: Introductions
00:05:59: Don's background
00:09:15: Hacks and decentralised exchanges
00:14:26: AirSwap tokens
00:16:14: How prices are supplied on AirSwap
00:18:01: The user experience
00:21:29: AirSwap's target consumer group
00:23:39: Risk of AirSwap clones
00:26:16: Pricing on the platform
00:32:11: Security challenges
00:36:51: Avoiding liquidity issues
00:38:38: How AirSwap generates income
00:41:59: Token value
00:46:24: Current and proposed integrations
00:48:21: Atomic swaps
00:53:41: Future plans
00:56:24: Final comments

THANKS

• Jason Camiolo for audio production, his website is at http://www.jasoncamiolo.com/

• James Parkin for helping me with admin and trading

• Paul Edmonds for graphic design

• Rob Paone for inviting me out to Brooklyn to meet Airswap