Somebody make this: auto-exchanger bitcoin wallet

[theymos]

Recently, there has been a large decline in BTC tipping on Reddit and elsewhere due to changetip's closure and on-chain fees which have long been too high for microtransactions. The long-term solution to this is stuff like Lightning, blinded bearer certificates, sidechains, etc., but annoyingly, none of this is working yet, so Bitcoin is useless for microtransactions at the moment. Therefore, I've been thinking that it'd be useful if someone created a service where people could use altcoins for executing BTC microtransactions. It'd work something like this:

1. You'd create an account on the service.
2. The service would give you an address for one or more altcoins. (And maybe also a URL which lists all of your addresses for all supported altcoins.)
3. Any coins received on those addresses would be immediately converted to BTC at the current market rate by default. Optionally, the service could support allowing users to change their settings so that a different cryptocurrency is used as the auto-convert target or so that no auto-conversions are made.
4. You could send the BTC in your account to any altcoin addresses, in which case a conversion would be performed just before sending, or to a Bitcoin address. In either case, the sender would be charged any required network fee.

The key point is that it should be easy, and behave almost the same as a normal Bitcoin wallet. I am aware that you could manually do this sort of thing by opening an account on a multi-cryptocurrency exchange.

The service could make money by widening the spread on the automatic conversions. It should not charge an extra deposit/withdrawal fee, as that defeats the whole point.

The advantage of this over just expecting everyone to use a single centralized Bitcoin wallet service and then doing off-chain transactions within that service (ie. like changetip) is that multiple competing services can exist and interoperate, and if you buy altcoins on more typical exchanges, you don't need to sign up for a separate service. This solution is inferior to Bitcoin-native microtransaction ideas like blinded bearer certificates, but there's no way for a normal person to use that stuff yet.

[theymos]

What do you think the feasibility of something like this is?

I don't think that it'd be very difficult. You could mainly just rely on some multi-crypto exchange's API.

[seven.71]

Constraints such as whether the conversion is done at the beginning of the transaction or when the new balance goes in our wallet ?
The conversion data must be in realtime
Plus a reference to bitcoin prices from where?
While bitcoin prices in each market vary, including altcoin

[nachius]

Constraints such as whether the conversion is done at the beginning of the transaction or when the new balance goes in our wallet ?
The conversion data must be in realtime
Plus a reference to bitcoin prices from where?
While bitcoin prices in each market vary, including altcoin

"4. You could send the BTC in your account to any altcoin addresses, in which case a conversion would be performed just before sending"

He knew people would ask .

[seven.71]

Constraints such as whether the conversion is done at the beginning of the transaction or when the new balance goes in our wallet ?
The conversion data must be in realtime
Plus a reference to bitcoin prices from where?
While bitcoin prices in each market vary, including altcoin

"4. You could send the BTC in your account to any altcoin addresses, in which case a conversion would be performed just before sending"

He knew people would ask .

Although the price is automatically converted into altcoin its value must be different

example

1btc converts 34eth ==> send ===> 34eth convert 1btc ?? Or its value can be reduced

[Lontongmie]

This is an interesting idea for a platform indeed. However, to get this business to a profitable place, it would need to have a huge following as it would need a large amount of micro transactions to make money on the conversions. Theymos, why don't you offer a free advertising slot on this forum to anyone who comes up with such a business?

[theymos]

1btc converts 34eth ==> send ===> 34eth convert 1btc ?? Or its value can be reduced

It wouldn't be an exact trade like that because there's always a bid/ask spread in markets, and the wallet service would probably add additional spread to account for volatility and to make profit. So if there were two different wallet services like this and you sent from one to the other, and assuming the most recent price was 1BTC = 34 ETH, it'd be something like:

1. Sender sends 1 BTC.
2. Sender's wallet converts to 33 ETH, losing 1 ETH due to the spread.
3. Recipient's wallet receives 33 ETH (minus some network fee, which I will here ignore).
4. Recipient receives 0.95 BTC, losing ~1 ETH due to the spread.

Those numbers are just examples. I have no idea what the actual "fee" would be; it could be higher or lower.

You would certainly get a better deal by trading on the market directly, but this is more convenient. It's similar to the difference in fees and prices between Coinbase's instant buy/sell and GDAX trading. Also, it's important that this is mainly a percentage fee rather than a large per-transaction fee; this fee model allows for microtransactions.

(If you send to someone on the same wallet service, the wallet service should avoid any trades and just do the transfer off-chain for a very low fee.)

This is an interesting idea for a platform indeed. However, to get this business to a profitable place, it would need to have a huge following as it would need a large amount of micro transactions to make money on the conversions. Theymos, why don't you offer a free advertising slot on this forum to anyone who comes up with such a business?

I'd consider giving them an ad slot for a week or two, but I don't really think that it needs that much of a boost. It's not as if you need a lot of capital to start this service, and there's a lot of potential for profit in the long term, even if it's slow at first.

If an acceptable service is created, I was planning on promoting its use on /r/GirlsGoneBitcoin (which I moderate).

[Lontongmie]

Ayee lol now I can say that Theymos responded to me 
But the idea that you wouldn't need a lot of capital to start this is completely false. You would need at least ten thousand dollars, and probably more, to hire the developers to make this software. It is doable, but would be quite expensive. Maybe it could be community-funded and sponsored by BTCtalk?

[theymos]

I just discovered that cryptonator.com supports 80% of what I was looking for, though it looks a bit shady...

[TheFuzzStone]

cryptonator.com

Be careful with it...

[CardShare]

Currently working on something just like this!  its kind of a multi function platform it will have a traditional exchange for fiat and the normal buy sell exchange crypto also a trading platform like mt4 for trading the markets but one of the features was going to be the ability to convert alt coin micro transactions into btc / eth payments and the integration of "Quick Convert Addresses™"  that would automatically convert deposited coins into alt's or into bitcoin depending on the users preference.

I think the idea is spot on and with the right development behind it and backing would make for a very successful project.

PS I am always keen for developers to come and help out in the project .

[barota]

cryptonator.com

Be careful with it...

yes i I have heard bad comments about cryptonator.com

beware

[TheFuzzStone]

auto-exchanger bitcoin wallet

Maybe this one?

[dihari]

Interesting. It would make the problems of small or exactly micro transactions clear. I am thinking​ about something like shapeshift.io , simple and every newbies with micropayments can use it easily.