Crypto Open Exchange Protocol

Nicolas Dorier proposed a new BIP via the bitcoin-dev mailing list which he referred to as the Crypto Open Exchange COX Protocol. From the summary of the BIP:

The goal of this BIP is to specify a simple protocol which makes possible decoupling of payment processors from exchanges.

The COX proposal gives customers options to choose payment processors while giving exchanges protection against crypto volatility. A merchant would visit a COX enabled exchange and configure and address source with conditions of what to do with funds transferred the the address. The exchange would generate an address source URI which could be copied to a payment processor such as a website e-commerce plugin.

When a customer wants to transact with the merchant via the payment processor (e-commerce plugin), the plugin/processor would would use the COX protocol to query the exchange on the conditions for payment and present the proper payment checkout page to the customer. Once the customers completes the transaction the processor/plugin uses the COX protocol to mark the payment as paid. Then the exchange would credit the account of the merchant and complete any exchange conditions.

This BIP somewhat resembles BIP70 which already describes a protocol for payments. However BIP70, as Nicolas stated:

… does not define a way for the exchange to communicate a rate attached to the bitcoin address, nor define a way to communicate to the payment processor the conditions under which they can bear volatility risk.

It really is a unique idea and by separating the payment processor from the exchange itself it could help aid adoption of Bitcoin as a true currency.

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