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In my opinion it's a completely different area that isn't as similar as you'd expect. For starters, cryptocurrency exchanges need to know the crypto they trade
by Klathmon 9y ago
In my opinion it's a completely different area that isn't as similar as you'd expect.
For starters, cryptocurrency exchanges need to know the crypto they trade with VERY well. It's an area where the law won't help you if you mess up. If someone steals a bunch of bitcoin from your exchange, a police report isn't going to get it back, it's gone for good.
Then add in that crypto exchanges are 24/7 (not just during business hours), and I'd argue that scaling them is much harder, nobody knows if cryptocurrencies will double (or more) in usage over the next few months, or if they will halve (or more) in that same time. A single runup could cause 10X the trading activity overnight.
I do think that we need more legal, regulated competition in this area, but I don't think for a second that the answer is Nasdaq trying to shoehorn cryptocurrencies into their current systems, they are just too different.
- saosebastiao 9y ago> For starters, cryptocurrency exchanges need to know the crypto they trade with VERY well. It's an area where the law won't help you if you mess up. If someone steals a bunch of bitcoin from your exchange, a police report isn't going to get it back, it's gone for good. With good KYC regulation and enforcement many "hacks" can be mitigated. The Bitgrail hack, for example, was performed by customers taking advantage of shitty code. Presumably they know which accounts withdrew funds, but if they knew who the customers were that belonged to those accounts, they could go after them. This stuff is a big reason why I support exchanges being regulated as money transmitters.
- tudorconstantin 9y agoKYC wouldn't help if hackers breach into legit users accounts.
- Klathmon 9y agoAll the KYC laws in the world won't help when someone in another country transfers a bunch of bitcoin from the exchange account to theirs. Or even worse in some cases, someone that maliciously "burns" all of your bitcoin irrevocably destroying it forever by sending it to a bad address. Even if you catch the person that did it, that bitcoin is gone forever, and you can't just bring it back without concensus of the extreme majority of all miners and users (which isn't going to happen in bitcoin, it barely happened in Ethereum when it was much smaller with the DAO hack)
- russdpale 9y agoI disagree. KYC means nothing after the hack has happened. I dont care about people being retroactively punished, I want my coin back.
- deleted 9y ago[deleted]
- overcast 9y agoA few years ago, a police report made on the other side of the country, got my cryptomoney back from some punk scammer kid, who was dumb enough to give me his friends real address to ship an item to. I gathered so much intel on his internet habits that it didn't require much police intervention to sort out. His Mom and Dad weren't pleased :)
- jiggunjer 9y agoa mail order scam isn't the same as a server hack.
- atm0sphere 9y agoTell the full story!
- sitepodmatt 9y agoFair points but you have to consider that many of popular Bitcoin exchanges until recently were some nasty PHP/mysql based matching engines. The non-crypto exchanges already have the matching engine technology to easily handle volume of trades that main exchanges see today and probably with greater reliability and latency guarantees (internally). The work on the tech side would be building the infrastructure around the matching engine, clients to move crypto in and out of the exchange, supporting margin trading, cold storage of significant part of client reserves, KYC/AML auto reporting, infrastructure for top tier clients - cross connects to matching engine, trade phone support, but this isn't rocket science (although I don't downplay the work involved)