Shapeshift AG has only been around for a few months, but there recent acquisition made the headlines. The company acquired Texas-based Bitfract, a company with technology that can exchange Bitcoin into thousands of other digital assets. This would make Shapeshift a viable asset in a marketplace where most cryptocurrency exchanges only carry a limited selection of coins.
The technology here represents the creation of the instant exchange. Of course, this type of exchange going live is still some time off, but the potential truly represents a fast- forward for the digital currency ecosystem. It would truly allow users to flip their digital wallets and wealth from any number of coins, while avoiding rising fees.
“The Bitfract team made expert use of ShapeShift’s open API to build a product that we ourselves were planning to build,” said Erik Voorhees, Founder and CEO of Shapeshift. “This demonstrated a great alignment of strategy and thinking, and their execution was so exceptional that we wanted to bring their talented team and technology on board.”
Willy Ogorzaly, Co-Founder and CEO of Bitfract, added: “When Erik asked if we wanted to join ShapeShift, the answer was immediately yes. We believe in a decentralized future where individuals freely control their digital wealth, and our team is honored to work alongside Erik and everyone at ShapeShift to make this a reality.”
The technology converts bitcoin into any cryptocurrency or cryptocurrencies by sending in the BTC to the company’s address, which then links to ShapeShift open API to convert it into multiple cryptocurrencies in one transaction.
According to the company, the Bitfract tool works by letting investors choose what percentage of their holdings should be in a particular asset, add the destination wallet addresses and send bitcoin in a single mass transaction. For example, a trader can use one bitcoin to purchase a set amount of Ethereum, Ripple, and Litecoin in one go. That means the trader can obtain their desired cryptocurrencies without having to go through multiple exchanges and make multiple transactions. Prior to this technology, this was undoubtedly a very confounding process with multiple steps.
Furthermore, the Shapeshift platform’s Prism technology could have legitimate tax implications for those who own large sums of crypto. To be exact, since you are not actually buying or selling assets, these are not individual taxable events. Instead, there will only be one taxable event when you close the Prism, and if there is a gain or loss. This system could also apply to security fanatics who do not want to trust an exchange. As collateral is held in a smart contract, it never completely leaves your possession.