April 2023, Alberto Sigismondi, Massimo Musumeci
The market for exchanging FIAT to Bitcoin and vice versa is a market dominated by bigplayers who often act with privacy-unfriendly APPs or websites that can collect a lot of information and are based on centralised systems that are easily censored and not always accessible to everyone. Many times these APPs rely on the app store or play store managed by Apple and Google, which can stop apps in any moment and which applies their policy to distribution of the apps.
Even if the service is on a website, this may be stopped and censored by the provider or may lead to data leaks and other kind of abuses.
We want then to provide the basis for an automated platform that relies on a decentralised communication protocol and enables end-to-end encrypted, censorship-resistant, open and replicable communication for any service provider.
The advent of the Nostr protocol, provides the foundation for a communication platform suitable for this new method of order management and acquisition, which is decentralised, end-to-end encrypted, does not rely on centralised servers, and allows it to be replicated for each new entity that decides to participate.
Nostr protocol is censorship-resistant because it operates on a network of distributed nodes (Relays) rather than a single centralized server or entity. This means that no single party has complete control over the network, and no single point of failure exists. As a result, it is much harder for any individual or group to censor or manipulate the data on the network. This appears to be the right place where the system can work.
Therefore, this can be considered censorship-resistant because it allows open and transparent communication and data transfers without fear of censorship or manipulation.
We are interested in NIP-04 since the bot uses direct messages to interact with users. Reading the NIP-04 we can get that: a special event with kind 4, meaning "encrypted direct message", has the following content:
It is equal to the base64-encoded, aes-256-cbc encrypted string of anything a user wants to write, encrypted using a shared cipher generated by combining the recipient's public-key with the sender's private-key; this appended by the base64-encoded initialization vector as if it was a querystring parameter named "iv". The format is the following: "content": "<encrypted_text>?iv=<initialization_vector>".
This kind is useful for our goal because permits E2E communications between users, based on a decentralized infrastructure. This can be used also by a Bot. Future improvements of this NIP may be possible and may lead to an enhanced experience for the user.
The idea of a Bot on Nostr protocol that can receive and forward FIAT/bitcoin exchange orders is related to the decentralization of the protocol itself. Therefore, we created an interface, available via direct message Nostr, that allows exchange orders to be acquired in a confidential and decentralized manner. Big companies like google, amazon, etc cannot block the system as it happens on playstore or appstore. The system does not need permission or to be allowed by any central authority.
The system can also be cloned on many different infrastructures and replicated and connected to many different providers in different jurisdictions. The number of services provided can be even higher.
Nostr profile is rich and currently provides various data including:
- the Nostr NIP-05 handle
- a lightning address where to receive zap
This makes it possible:
- to push sats automatically to the lightning address defined in the profile
the Bot system is not tied to a single provider. It can be cloned, connected to different providers (we would add many by adding libraries) and modified to match personal customization. It makes possible to become a decentralized interface to one or many providers.