In times of hyper-monitored finances and almost zero privacy, a new bitcoin (BTC) exchange allows you to operate without the need for registration or accreditation of personal data. I'm talking about Mostro, a project that is taking its first steps.
Basically, the proposal consists of an exchange that operates in a decentralized manner, using the Nostr peer-to-peer communication network, which in turn is based on Bitcoin. The main objective of this new exchange is to allow people to buy and sell bitcoin using the Lightning network to carry out their transactions, which are then recorded in Bitcoin's distributed ledger.
To try Mostro, you need to have a Nostr profile and a Lightning wallet. There are two possibilities: use the web client or use the command interface directly from the Mostro terminal.
It should be noted that Mostro is an open source project that emerged as an evolution of the Telegram bot called @lnp2pbot. In fact, the developer team is the same.
This bot has had significant growth since its launch. However, it has an Achilles heel that its own creators noted: the possibility of censorship by governments, since it is linked to the Telegram messaging platform.
The bot works excellently, operating on Telegram, a formidable platform. However, we do not know if one day it will be reached by the tentacles of a powerful government looking for political dissidents or simply people who publicly make it uncomfortable.
Francisco Calderón, developer of Mostro.
It is in this context that Mostro emerges as a more resistant alternative to censorship. The exchange uses Nostr nodes for communication between exchange participants and the Bitcoin Lightning network for economic transactions.
This quality of Mostro means that, no matter who the user is or where they are, they will be able to operate completely normally. This differs from other peer-to-peer exchange alternatives, such as Binance P2P, which require the creation of an account and compliance with KYC to be able to buy or sell cryptocurrencies. Another difference is that Mostro does not depend on an entity that acts as an intermediary, but on programmed code based on Bitcoin and Nostr.
How Mostro works
In simple terms, Mostro acts as an intermediary between buyers and sellers of bitcoin. It uses a node on the Lightning network to manage transactions. When someone wants to sell bitcoin, Mostro creates invoices with held invoices that the seller presents so that a user of the platform accepts the exchange.
When a buyer accepts the exchange, they contact Mostro, which sends the invoice that the seller must pay (in sats, minimum unit of BTC) and holds their funds. The next step is sending fiat money (or another cryptocurrency other than BTC) from the buyer directly to the seller.
Once both parties confirm that the procedure has been completed, Mostro releases the seller's held funds to the BTC buyer. This role of intermediary between the parties minimizes the risks in the transaction. For now, only operations with a limit of 20,000 sats (approximately USD 8.4) are allowed.
Commissions on Mostro are paid by sellers on each successful order. These funds are intended for the user who provides their Lightning node to collaborate with the operation of the protocol and thus allow them to cover their operating expenses, given that it is necessary for these nodes to have liquidity and be active all the time.
These nodes that facilitate transactions on the exchange are called, precisely, “Mostros”. What is distinctive about Mostro is its decentralization. Its developers encourage anyone to become a "Mostro", which enables a greater number of options for users. Managing a Mostro implies having an operational Lightning node with sufficient liquidity and high availability for transactions.
On the other hand, reputation plays a crucial role in the Mostro model. Users can rate Mostros, which creates healthy competition between them to attract more users. Those Mostros that do not provide good service may be rejected by users, which affects their incentives to continue operating.
