Super Simple Swap presentation at Blockchance
Reading Time: 6 minutes ; Published: 1 year ago on February 28, 2022
On December last year, Nimiq's Ambassador Max Burger gave a presentation about the new non-custodial crypto-fiat swap exchange SuperSimpleSwap, created by Nimiq. Here you can find the resume of the transcription.
Holly Hilton (Presenter at Blockchance):
Nimiq is a non-profit and open source project with a strong focus on technology and simplicity. Max will explain what's necessary to build an easy to use blockchain ecosystem for payments, without falling victim to the temptations of centralized shortcuts.
Max Burger (Nimiq Ambassador):
I'm really happy to be here today, my name is Max. I'm the official representative of the Nimiq project. As Holly just said we are a not-for-profit open source blockchain project, with a clear goal of building the easiest-to-use and most accessible blockchain payment system on this planet. This is a bold vision!
We are also here to present one of our latest solutions SuperSimpleSwap. I'll tell you what this is all about in a couple of minutes, but first of all today we are talking about the evil temptations of centralized shortcuts.
What does a centralized shortcut look like?
We are here at Blockchance to celebrate the blockchain world and the crypto space. We have this beautiful world of decentralized applications and projects, but still there are many centralized entities and centralized players within this ecosystem.
What kind of benefits are there to a centralized player?
We are talking about this bright decentralized future that we're all envisioning, but it might of course be that you are running a business. Business models rely on being centralized entities because they need licenses or require you to run a company. But there are also decentralized blockchains or crypto projects, who are also falling for centralized shortcuts. Because there are reasons indeed to justify making things centralized. Let's just go through some of these reasons.
With the first reason being, if you offer a solution through a centralized entity, it makes everything easy. This is a huge advantage, because you know blockchain technology and all that comes with it. All the concepts of smart contracts and DeFi. From the user's perspective all that is very complicated, and so if you are a centralized player you can do a everything easy to use and just show a beautiful user interface to your clients. They can send and receive cryptocurrencies. They can even buy and sell them. It just looks like it's as easy as eating a piece of cake.
Take Coinbase for instance, or other major players. The big advantage they have is, they offer a very easy on-ramp for new users, by making the user interfaces very easy to use, and they're hiding all the complicated blockchain tech in their basement. That's really easy!
So, what are we doing at Nimiq?
We are taking a new approach to creating the most accessible on-ramp into the world of cryptocurrencies, but remaining fully decentralized. This is very important to us as a project, decentralization without compromise, but of course we know that to achieve broad-public-like awareness and adoption we have to make things easy to use for the end user.
So, what we envisioned is, it would be awesome if people could just browse to a website, and with only a few couple of clicks they could open up their own self-custodial web wallet. All you do is you select a little avatar, which represents your address, you type in a password, repeat it and then that's all you have to do. Like, not even an email address is required, no registration, no software downloads, just by downloading the access file with your keys is all you'd ever need to do—"your keys your crypto". This is the true spirit, you can open up a web wallet that lives in your browser. It can live on your mobile device, on your tablet, or on your PC, and this offers you a very easy to use user interface and a nice user experience. You might hold Bitcoin in there, like digital gold as the store of value, and NIM as a digital form of cash that is fast and transactional.
Another cool thing is, this web wallet runs a node within your browser, so by opening the Nimiq web wallet
you are directly connected to the Nimiq blockchain. We made this possible by compressing all the complex blockchain technology that is necessary in order to run a node, and we made it so compact that it actually runs in your browser window. That removes the middleman that is necessary in order to run a node in some cases, and so we are offering the easiest-to-use interface that makes it actually very easy and accessible for everyone to get started, just with a mobile device. We are running true blockchain technology right within your browser so that you don't need any technical knowledge or complicated tools in order to become a true peer of the network.
The second reason is that with a centralized entity you can do things quickly. You can make processes fast because you can give guarantees and make, for example, waiting periods much shorter. You simply hide the details from the users. Of course, you can also make blockchain networks fast by developing a distributed network of super computers, and then you can—again, nerd stuff—in the basement run one of these super computers running the network at seventy thousand, eighty thousand, a hundred thousand transactions per second. It looks great in the numbers the fast transactions on the blockchain, but it's still a centralized component that really enables this speed.
What we did is, we thought, what would it take to build a single chain blockchain capable of running at the peak performance theoretical limit of what a single blockchain can achieve. So we took our blockchain that runs in your browser and we developed our own consensus algorithm, in order to achieve consensus faster, and build a blockchain that creates blocks in just under a second while staying truly decentralized in a distributed network, without the necessity for some supercomputers to speed up things.
And the third reason, and this is also a very convenient reason for making things centralized, you can make everything compatible because you just take two systems who are usually not interconnected and then you build a solution—once again, in your basement—that would address that. You build a nice bridge from A to B, that looks very easy to use from the end user side, but to make those two systems talk to each other, namely the traditional banking and the crypto world, you just introduced someone in the middle who actually facilitates that process.
Talking about on- and off-ramps, this is—I think—, one the missing links that the crypto sphere was still missing. Because we are talking—as I said—about this wonderful decentralized universe, but in order to get into this world, and then out again into the traditional world, you usually have to go through centralized entities. Because companies who take your crypto and give you euro in exchange, or that you have to give fiat to for they to exchange it into crypto, they exist because all these beautiful blockchain based mechanisms from the crypto world, they are reserved only for crypto assets and tokens, so they don't work with traditional banks. That is what we wanted to solve with our partnership with Ten31 Bank.
So let me introduce how we solved the fiat to crypto on-ramp access in the most decentralized way possible. You store your crypto on a Ledger, and what you want to do is to buy some Bitcoin. That means you connect your device, you get a new crypto address, and then we built this new web service SuperSimpleSwap.com that can perform true self-custodial atomic swaps between fiat and crypto. So, what you do is, you type in the amount of euro you want to swap for Bitcoin, and you can pay with your personal banking account. You type in your Bitcoin address that you took from your Ledger Life, and then you start the atomic swap. Now the Bitcoin are locked up on-chain in a HTLC on the Bitcoin blockchain, and the protocol now opens up a second smart contract with the IBAN address for the payment. That is actually a smart contract controlled bank account, so this is the smart contract for the fiat side of things that we developed, and what you want to do now is you go to your banking interface and make an instant transaction from your own bank account into this fiat HTLC IBAN address. Both HTLCs time out after 90 minutes, so this is a true non-custodial atomic swap, either it happens as intended with both parties receiving the assets they get in exchanged or the contract giving back what you deposited.
The swaps complete when you send the euro and the corresponding cryptographic secret is revealed to the contract that holds the Bitcoin, and the Bitcoin are sent to your wallet. What we described is a direct transfer from a traditional bank account to a crypto wallet, and that also works the other way around. That means you easily send your Bitcoin or NIM to a smart contract, and get the automatic payout to your bank account. This solution is called Super Simple Swap.
The last thing that I want to introduce is a little hint at our partnership with the Austrian fintech Salamantex, they are presenting with us at Blockchance too. They're also a partner of Ten31 Bank, and they introduced something really, really cool!
Salamantex is making traditional payment terminals, as you see them when you go out and you want to pay with credit or debit card, compatible with crypto. Salamantex is upgrading the traditional existing payment terminals in order to make them capable of interact with cryptocurrency, so that when you're at a shop all the merchant have to do is to select the cryptocurrency on his payment terminal, and then you scan the code with your self-custodial wallet and make the payment. You just paid with crypto on a traditional payment device. This is how we envision the future of decentralized payments, where it's easy to get started, easy to get in, and easy to spend.
Please don't fall for centralized shortcuts, stay true to crypto. This is what we do at Nimiq.