Trustless Bitcoin Exchange Mercury Launches


#1

This is very exciting.I came across the Mercury alpha ANN some time last week and had PM’ed mappum since colored coins were part of his ANN. Just downloaded the wallet to check it out and looking forward to see open assets being integrated. Hopefully soonTM :slight_smile:

With exchange hacks making headlines on a weekly basis, what would you think of an alternative where no third party exchange is involved in your trades? What if your trades would take place on the blockchain and not on some exchange’s database?

The results are simple:

  • There would be no need for exchanges to be centralized.
  • Trading is peer-to-peer.
  • Trading takes place from wallet to wallet.

Welcome to Mercury Exchange, the world’s first trustless cryptocurrency exchange.

Using the Cross-Chain Atomic Swap protocol, buyers and sellers can trade different cryptocurrencies, without a third-party. A preview is available for download here for testing purposes. The source is released under an MIT license.

Users should note that this is an early alpha version, and it is likely there will be bugs. Users should exercise caution when trusting the software with actual funds.

At present, Mercury v0.1, an alpha version, supports:

  • Bitcoin
  • Litecoin
  • Dogecoin

Plans to add other currencies and cryptographic assets are being considered, such as:

  • Ethereum
  • Colored coins (USD, company stock, etc.)
    • Bitcoin sidechains
  • Nubits
  • Filecoin

The developer, who uses the handle “mappum”, stated on the Bitcoin Forum that he has been working on the project for the “past few months”. He says that any crypto-asset can be exchanged on Mercury, given that it supports the use of transaction scripts.

Mappum told forum users that the software has not yet been audited, but there are plans for the code to be professionally reviewed.

A decentralized bitcoin exchange would have large implications for the bitcoin economy. Users would not have to trust their money to a third party. Because the software is open-source, it can be checked for bugs and security vulnerabilities by the community.

I’ll be closely watching this innovative project that promises some awesome developments.

Who else thinks this might be a killer app for the cryptocurrency markets and beyond?

Source: CoinBuzz.com


#2

This looks awesome!


#3

It does. Very nice UI already got my testnet coins pending :slight_smile:

HOW IT WORKS

Trades happen entirely on the blockchain, with no risk of the exchange getting hacked or greedy exchange operators running off with your money. Your private keys are only stored on your computer.

When making trades, your wallet will use the Mercury Order Book service to find bid or ask offers opened by other traders. This service is centralized, but it is never involved in the actual transfer of funds so it doesn’t require any trust.


#4

I’ll be checking this out when I get home from work :slight_smile:


#5

Was this the project Matt Bell was working on?


#6

I’ll tell you what, all this on the block chain stuff really looks good, it helps with transparencies and trust. I would love to see something like this where a person could stake a ton of different coins and not have to worry all the different qt wallets etc. I know it could be done based on what I have been seeing lately.


#7

“any crypto-asset can be exchanged on Mercury”

This seems way better than any other trustless decentralized exchange which deal mainly with their own assets.


#8

Interesting need to watch this closely.


#9

Well it’s been almost 2 weeks what’s the latest on this? @cyberdexter are you still looking at this or using it? I just wondered how thing were going with it?


#10

There hasn’t been much happening in the last two weeks. The thread on BCtalk has 5 pages with a few good posts in it and v0.0.2 was bumped 9 days ago on github but I didn’t check it out yet. Didn’t see any major commits, not the ones I’d like to see anyway :wink:


#11

Kind of weird that nobody has done this sooner, hard to convince the whole world Cryptos are the future when every two weeks some exchange gets millions of dollars in coin stolen. :smile:
Really interested to see how this would work, is it a program that runs on the respective coin’s blockchain? Like how escrows and time-delays on the blockchain work, is it just utilizing encrypted buy and sell orders stored in the blockchain and then filled by individual users? If that were the case, and say I’m buying BTC with LTC, I would have to trust the Mercury exchange’s dev team that when I send my LTC to the seller’s LTC address that the information would be correctly transmitted to the BTC blockchain so that their BTC is sent to my BTC address, since there’s no way for the individual blockchains to communicate between each other.
Or am I way off base and misguided? :slight_smile:
Super exciting tech though, about time someone made a trustless exchange. Never fun having your hard earned BTC being only as safe as the tired Lithuanian coder who secures the exchange server :grin: haha


#12

Mercury itself only matches the orders with a centralized order book server. The trades utilize the atomic swap protocol for cross-chain trading.

The traders create deposit transactions, spending the coins they will be trading away. The deposits can only be redeemed if the secret number X is provided, along with a signature from the person it is paying to. Only Bob knows what X is.

image

Bob claims his payout, which sends the coins in Alice’s deposit to his wallet. By doing this, he publicly reveals X.

image

Now that X was revealed by Bob, Alice can claim her payout.

image

If during the process one of the parties disappears, the funds can be recovered using the pre-signed refund transaction.

image

From what I’ve read the developer mappum will implement the OP_CHECKLOCKTIMEVERIFY function as well. Not sure what to make of that since there is a lot of controversial opinions about the time lock function in the crypto-community. Some saw the function can be easily exploited, others say it depends on the method of implementation / application.

Right now the only vulnerability of Mercury (imho) is the orderbook server. Since that is centralized and if the server gets DDOSed the orderbook would become unresponsive. But according to the dev it will be possible to run orderbook servers so traders could switch server.

Fom the BCtalk thread:

As for the centralized order matching, this part of the protocol does not require any trust, so it is still considered trustless. If the server gets DDoSed, traders can use other orderbook servers, or even find counterparties themselves through e.g. IRC and forums.