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Litecoin

ShapeShift, A Cool Cryptocurrency Converter, Clinches $1.6 Million In Cash

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Do you need Clams? Nucoin? ShapeShift.io is here to help. This oddly simple system is a universal and anonymous cryptocurrency converter created by one of the pioneers in bitcoin, Erik Voorhees. How does it work? You request a certain cryptocurrency – Litecoin, for example – and give the service a deposit address. Then you simply deposit another currency – Bitcoin, for example – into a deposit wallet. The system converts the currency automatically without having to store your personal information.

Why would you want to do this? Well, some currencies are useful on some sites – Clams is popular for gaming sites while NuBits is pegged to the dollar, resulting in lower volatility. Because conversions between these various currencies requires no personal data you can buy any one of them and then convert them to BTC in the blink of an eye.

“I launched this project to demonstrate that currency exchange could be handled completely differently than anything done before,” said Voorhees. “Cryptocurrencies allowed non-custodial exchange, without users having to sign up or create accounts. This is impossible with fiat currencies, and yet every Bitcoin exchange was modeled after fiat currency exchanges. ShapeShift, like SatoshiDICE before it, demonstrated how an old business could operate in a brand new way because of the properties of cryptocurrencies.”

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The company just raised $1.6 million from the Digital Currency Group and Roger Ver as well as angels Bruce Fenton, Trevor Koverko and Michael Terpin. ShapeShift did the equivalent of $2 million in volume in July and have an API so programmers can use the service to convert funds on the fly. Interestingly, Voorhees has a strict “no fiat” policy on the site which means it is completely separate from traditional transfer mechanisms. In short, you can’t send dollars to be converted into Dogecoin. In fact, the traffic is completely anonymized so he neither knows his customers or can see what they’re doing. “ShapeShift has no user accounts, signup, or registration process whatsoever,” he said. “But it’s faster and far more convenient than traditional exchanges.”

All told, there are 1,300 currency combinations available to users, a “FOREX record” according to Voorhees. While the use case for a popular Japanese memecoin called Monacoin for might be limited right now, Voorhees sees a day when all currency conversions will happen as quickly as they happen on ShapeShift.