Automated decentralized exchange between bitcoin and similar currency?
No, this is impossible (so far as we know). But the reason is very, very subtle.
The crux of a decentralized system is that nobody gets to decide what the rules are. Otherwise, whoever gets to decide the rules effectively centralizes the system.
Bitcoin is decentralized because anyone who wants to can use whatever rules they want. Those who agree form a useful blockchain.
The problem with this scheme is that there has to be some mechanism to decide what controls the real bitcoins that back the system. For example, bitcoin and bitcoin cash forked off and nobody got to decide which chain was &quot;real&quot;. Both chains now compete in the market.
If your system forks, who or what decides which side of the fork gets the actual bitcoins that back your currency? They can't both get all the bitcoins -- that would require the number of bitcoins backing your currency to double.
There is no known decentralized way to make such a choice.
Think it through -- what do you think should happen if two groups of people using your currency disagree over what the system's rules should be? They can't each get what they want because they are arguing over how a fixed amount of bitcoin should be used.