The cryptocurrency space has been steadily evolving and growing more complex for over six years. During that time, Bitcoin has seen its share of hype and mania, all while making significant inroads in merchant adoption and the financial sector. But less attention has been paid to other cryptocurrencies like Dogecoin and Litecoin, of which there are now hundreds.
One new company has made it incredibly easy to obtain and pay with those alternative currencies. It’s called ShapeShift.io, and it has effectively rendered competing cryptocurrency exchanges totally obsolete. This is thanks to a lightning-fast exchange service, as well as simple API tools for websites that deal exclusively in bitcoin.
The result is a very fluid, symbiotic relationship between bitcoin and the alternative cryptocoins. This article will break down exactly how ShapeShift works and why its services are so significant for the ever-evolving cryptocurrency ecosystem.
Pain Points of Trading
Although it has become progressively easier to purchase bitcoin — thanks to companies like Coinbase and Circle — it has remained a burdensome affair to then exchange it for alternative cryptocurrencies that exist on their own blockchains. This trade-off can be desirable for several reasons: enhanced privacy of Dash, price stability of TetherUSD, day-trading between alts, or simple curiosity.
Previously the process involved signing up for an altcoin exchange, some of which are less than scrupulous with their operations. A person had to make a username and password, deposit bitcoin, wait up to an hour (or more if the exchange is having issues) for the funds to confirm, find the desired altcoin pairing, make an offer to trade with someone, and finally execute the trade.
One last step was necessary for good practices: withdraw the altcoin funds to a secure wallet on a local computer. This was crucial to avoid losing the money when the cryptocurrency exchange inevitably suffers a hack, theft, exit scam, or funds freeze — all of which have happened at one point or another.
Now forget all of that nonsense, because ShapeShift’s process is light years ahead of those services in terms of ease and simplicity.
The ShapeShift Innovation
The homepage presents the core tool, front and center. Pick the deposit currency (most people would start with Bitcoin) and then choose a currency to receive (Blackcoin, for instance). Literally the only required information is the receiving address for the converted money.
Clicking Start brings up an address for the deposit currency and a corresponding QR code. The deposit function works like a charm, even when using the site through a smartphone or tablet. On my Android device, I was able to quickly copy the deposit address in Chrome and paste it into my wallet app.
Once the deposit is sent, it takes a few minutes at most to receive the converted currency in the specified withdrawal address. And that’s it. No waiting around for 2 to 6 confirmations of the deposit, and no waiting (or praying) for a fellow trader to make the trade happen. Somehow, ShapeShift handles everything behind the scenes.
A process that used to take hours is now reduced to mere minutes. This massively reduces the trust that needs to be placed in the website, since a hack or theft would only claim the funds that had very recently been deposited. Gone are the days of million-dollar heists because traders treated the exchange like a bank that would hold money indefinitely.
ShapeShift Tools and Tricks
So we now have the ability to exchange bitcoin and various other cryptocurrencies between each other, nearly instantly, with almost no trust placed in the website itself. That alone is a huge advancement for anyone involved in cryptocurrency, but the implications go even deeper.
The clever team at ShapeShift have baked their instant-exchange tool into an application programming interface (API) that gets embedded on websites in the form of the “Shifty button.” It enables any bitcoin-accepting website to also accept other cryptocurrencies which get automatically converted into BTC — essentially acting as a payment processor for altcoins.
Another useful tool devised by the ShapeShift team is the Lens browser plugin. It’s an add-on for Chrome and Firefox that detects bitcoin addresses in web pages and gives the option of sending altcoins instead. With its signature quickness, ShapeShift converts the money within minutes and sends the equivalent amount of bitcoin to the destination address.
By developing these slick tools, ShapeShift has positioned itself as the definitive payment processor for altcoin-to-bitcoin conversions. The service is already getting integrated into popular businesses such as Purse.io, which enables bitcoin purchases of discounted items on Amazon. By integrating ShapeShift, Purse can now accept many different cryptocurrencies in exchange for Amazon items.
Currencies More Interchangeable Than Ever
It’s for these reasons that this company is so groundbreaking in the cryptocurrency space. For the first time, people can exchange between bitcoin and many different altcoins as easily as sending an email. The process is fast, seamless, and even somewhat magical.
Furthermore, by creating simple and streamlined API tools, the service has become a de facto payment processor for the entire cryptocurrency space. Companies like BitPay and Coinbase have already enabled over 100,000 merchants and retailers to accept bitcoin as payment — now ShapeShift allows all of them to also accept altcoins without even knowing it.
These are fascinating times when it’s possible for someone to pay for products on Amazon, Overstock, and Microsoft using lesser-known cryptocurrencies like Clams and Potcoin — and the conversion to Bitcoin and dollars happens automatically in the background. It’s a sign of increasing financial freedom, as well as a growing symbiotic relationship between bitcoin and its alternative brethren.
ShapeShift has succeeded bringing cryptocurrencies closer together, and the whole ecosystem is better off because of it.
Is ShapeShift a game-changing innovation for the crypto financial industry? Let us know what you think in the comments below!