FreeBitcoins.com’s Swap tool is a blockchain trading tool that allows users to trade between different cryptocurrencies without the need of creating an account on FreeBitcoins at all. The way this system works is that users select what coin they want to deposit and what coin they want to receive. The FreeBitcoins system then presents the user with a deposit address. After the user's confirmation receives the appropriate amount of confirmations, the coins are then traded on our full-service altcoin exchange using the exchanges API to make a market trade. Swap charges a 1% service fee and all exchange fees. One major difference between Swap and our exchange is how they process miner fees. Swap deducts the exact miner fee spent from the transaction, but exchange deducts a flat fee.
Swap uses market trades and these orders are very aggressive types of trades and they fill at the best price available that instant. A market order can’t be canceled after it is placed either because the market order's job is to instantly fill for the best price available on the bid or ask. It’s a common misconception that a market order will yield the Trader the “last trade price”. This is wrong. The last trade price has nothing to do with a market order. The final trade of the market order will become the last trade price.
For example: If there is 1 BTC on the Clamcoin market to buy at 0.01 BTC, the last trade price of CLAM was 0.02 BTC, & I place a market order to sell 0.5 BTC worth of CLAM. My market order would trade for 0.01 BTC. The new last price would now be 0.01 BTC. I would NOT get the 0.02 BTC because that order no longer existed on the books.
This is exactly how the FreeBitcoins Swap exchange works as well. The coins that are deposited are sold and converted to the customer's desired coin as fast as possible at the best available price on the FreeBitcoins exchange. The new coins are then withdrawn instantly to the customer's address that was supplied at the beginning of the trade.
Since FreeBitcoins Swap exclusively uses the FreeBitcoins exchange (XChange) this prevents users' funds from being held by any third parties. Most Swap-like platforms are just third-party middlemen that use their customers' money at sketchy offshore exchanges. FreeBitcoins used to do that as well until we had so many negative experiences with third-party exchanges not processing transactions in a timely fashion and we would catch the blame or take weeks to withdraw due to low limits! This problem was eliminated when we created our own automated altcoin exchange.
Customers can use Swap with confidence that their exchange won’t be frozen mid-trade for KYC. FreeBitcoins does not offer any fiat or fiat-like pairs (stable coins). This simplifies the process for our customers, reduces responsibility for FreeBitcoins to store sensitive/private information about our users, and prevents trades from being delayed.
The only drawback of FreeBitcoins Swap not trading on third-party exchanges as well as our own is that it limits the market liquidity. Rather than drawing liquidity from five different exchanges, our service draws liquidity from our single source. Low liquidity and market orders are kinds of dangerous combinations. For this reason, we highly recommend Swap traders check the bid and ask directly on the FreeBitcoins exchange prior to placing a Swap. The market can also change before Swap deposits receive enough confirmations.
Please use Swap carefully, but as the FreeBitcoins exchange grows… so will the Swap tool's stability.
It should also be mentioned that Swap is a part of the FreeBitcoins affiliate program. Affiliates earn 50% of the trade fee on all Swaps. So affiliates earn 0.5% of every trade processed on Swap. Since Swap is treated as a normal customer on the exchange, the service fees from the exchange are not shared with the Swap affiliate trade, but the trade still assumes those costs. If a trade exchanges 1 Bitcoin through Swap, the affiliate would earn 0.005 BTC deposited instantly into their exchange account. Swap affiliate payouts occur at the moment the trade is complete. The affiliate program has a single URL that covers all of the FreeBitcoins services. You can find more details or join our affiliate program by clicking the link in the footer of this page.
FreeBitcoins.com was registered in 2010 when Bitcoin was trading for around 25 cents each coin. FreeBitcoins.com’s exchange is headquartered in the United States at Dover, Delaware, and is owned by MY LLC. Our team consists of two employees. The current CEO is Steven Steiner (BAC) and the CTO is Scott Llewellyn (X). Steve also handles customer service and Scott squashes code bugs.
Thank you so much for checking out our Swap tool and we are sure you are going to love it.