Summary

Erik Vorhees’ twitter handle, which depicts the Titan Atlas valiantly bearing the world’s burden on his shoulders, hints to his Randian proclivities. Mr. Voorhees would most likely agree that the creative potential of man is limited only to the extent by which the government interferes in the process. It is thus no surprise that Mr. Voorhees is such a passionate supporter and participant in the bitcoin project.

Bitcoin is the result of incredible human ingenuity which can disrupt, among other things, the government’s money monopoly. And not only does it offer potential for increased autonomy over our own financial lives and commercial relationships, it is a tool to reclaim privacy on an internet that has increasingly become centralized and surveillance-friendly.  It is in this spirit that Shapeshift was launched.

Mr. Voorhees’ excellent product allows the registration-free exchange of a number of cryptocurrencies against one another. The API allows easy integration of the product into third party sites and services, while a browser extension allows users to purchase products from vendors using altcoins, or merchants to accept 40+ different cryptocurrencies. It has built a terrific iOS application, with Android on the way. We feel that it sets the bar amongst crypto-only exchanges.

It should also be mentioned that Mr. Voorhees has been the most vociferous opponent of New York’s BitLicense, which he has depicted as subjecting Bitcoin to the dithering hands of NY-based bureaucrats at best, and at worst leading to the corruption of the project.  New York now has the dubious distinction of being the only jurisdiction to which Shapeshift will not offer its services, arguing that the regulations lead to an erosion of consumer privacy to which Shapeshift will not contribute.

Security

Shapeshift provides no wallet services as it never actually holds user funds. Exchanges are immediately settled to a user’s external wallet after the inbound deposit has received one confirmation.

Gravitas

ShapeShift is a Erik Voorhees joint, run from offices in Switzerland just outside of Zurich. The platform has received $525,000 in seed funding from industry heavyweights Barry Silbert and Roger Ver, and an additional $1.6m in a later series A funding round from Messrs. Silbert and Ver, as well as exchange Bitfinex – not that Mr. Voorhees necessarily needs the help.  In July 2013 he exited from his investment in SatoshiDice to the tune of $12.4 million, some of which no doubt was reinvested into Shapeshift.

All this to say – Shapeshift has solid financial backing by some of the very biggest entrepreneurial names in the Bitcoin industry. Mr. Voorhees is a leading public advocate for Bitcoin, and is well known both within the industry and without. He has a proven track record for delivering solid products, and in our view Shapeshift will be the best among them.

Opening a Shapeshift Account

There is no account opening with Shapeshift. No registration, no email confirmation, nothing. Certainly no document collection or KYC process. And, at least in the view of their compliance squad, they do not run afoul of AML regulations. This is primarily due to the fact that they hold no customer funds, which is how it is explained on the Shapeshift website.

Additionally, Shapeshift operates solely within the bounds of the cryptocurrency market – they do not act as an on off-ramp from crypto to fiat, which is where the KYC/AML requirements are stringently enforced. Indeed, mainstream bitcoin exchanges collect minimal information for bitcoin-only deposits – and that is when they are actually holding the customer funds and sometimes allowing trading against fiat currency.

Shapeshift Product Review

Shapeshift means to provide a platform for the easy and fast exchange of cryptocurrencies, and boy do they deliver on the promise. First, the website is sublimely simple. A deposit and receive box located smack in the middle of the homepage allows users to jump right into the self-explanatory exchange process.

1. Select the deposit cryptocurrency, and input the type and amount of crypto you would like to receive. Then copy your wallet address, and paste it into the field entitled “Your Payment Address”. Click Send.
2. A new screen will display showing the address to which your coin should be sent. A clock counts down from 10 minutes, after which the displayed exchange rate will change. Send your coin to the displayed address.
3. Small deposit amounts are instantly credited, while you’ll have to wait for one confirmation for larger deposits. Once completed, a “Shift Complete” screen is shown, and you should have your coin.

There are 40-odd coins available for trade on Shapeshift, and they are quick to integrate the most important and innovative offerings in the market. While 40 coins is perhaps a bit too many for our taste and we could easily cut out about half of them, Shapeshift is much more responsible than many of the mainstream crpyto-exchanges in avoiding the listing of scamcoins or obvious lemons. So while you’ll be spoilt for choice with Shapeshift, you most likely won’t hear the news that they are delisting your coin, along with another 40, as is so often the case with exchanges like Poloniex and Bittrex.

Lens Extension

Altcoin users rejoice! Shapeshift has created a browser plugin allowing supported altcoins to be sent to any bitcoin address as payment. After installing the plugin, a fox icon will appear next to bitcoin addresses at all of your favorite bitcoin merchants; clicking the icon will launch a shapeshift payment box with the address to send your altcoin, from which shapeshift will automatically exchange and complete your transaction.

Mobile

The Android product is currently being developed, and should debut in the google play store shortly. Shapeshift launched in June the first ever native crypto-trading app for iOs, and it is characterized by the same exceptional engineering as the web-based product. The same process described above is recreated on mobile, with a few additional nice to have features, like a QR code reader, a stored list of your receiving addresses for convenience, and a transaction history tab.

Shapeshift Might not be for you if:

You are looking to speculate.

Shapeshift is basically a brokerage.  If you are looking to frequently trade you would be better suited at an exchange like Binance.

And don’t forget to do a bit of bargain shopping.

Changelly is an alternative with a few different coins and often lower fees.  Worth it to check them out to compare prices prior to completing a purchase.

Bottom Line

So there you have it. In our view, Shapeshift is an excellent example of the innovations made possible by Bitcoin and cryptocurrencies: anonymous and nearly free commercial transaction; an entirely secure environment; and with a degree of simplicity previously unheard of.  Fancy investing a bit of your coin in Ether, Storj or Gemz?  Give it a try through Shapeshift.io, it will take you all of 30 seconds from…now.