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Safety first
Important News, News
November 6, 2018

Safety first

Arutyun Nazaryan
Editor of bistox.com
and BlaBla.Blog

The safety of trading on exchanges has long been almost the main problem for all crypto traders. And if any behavior of the market leaves an opportunity to earn or just not to be broken (well, at least, theoretically), then when your money was stolen – you will not get anything good from it.

Yes, after the stories with Mt. Gox, Coincheck and dozens of other scandals related to the theft of clients’ funds, many exchanges began to assure that they use “cold storage”, and most of the crypt belonging to their clients is stored on wallets that do not have access to the network. It sounds, of course, nice, but…

Their clients do not have any opportunity to verify the veracity of the statements of exchanges. Moreover, in fact, the owners of the exchange can make everything with users’ money. And the options are not limited to the sudden “disappearance” of the owners along with all the contents of the accounts. It is not surprising to anyone when traders face problems with withdrawing funds (delays, mistakes, “lost” coins, etc.). Of course, most of these problems are caused by technical reasons, but when such errors occur systematically, “vague suspicions” arise.

Decentralized exchanges, unfortunately, are not a panacea. They ensure the security of users’ accounts, but, alas, they are still working too slowly – most blockchains cannot provide the required number of transactions quickly enough. And when security measures prevent earnings – people prefer earnings, so there are still some troubles with the popularity of such exchanges and the liquidity on them.

Some developers try to get around these problems by creating “semi-decentralized” exchanges. The trading platform itself functions centrally (and quickly), but the cryptocurrency does not leave the users’ wallets and deals are conducted directly between them. Perhaps this is the best option, but there is still one problem.

Now the cryptocurrency market does not have the established “rules of the game” and, de facto, is not regulated by anyone. Because of this, the most diverse (and, alas, the most primitive) schemes of manipulation and fraud flourish here. The same “pampas”, which were not heard only by a deaf crypto trader, died 20 years ago on the stock market. It is thanks to the efforts of regulators.

In fact, the only platform today that tries both to provide effective protection to its customers and to use all the advantages of decentralized solutions at the same time is Bistox.

Fast NEM blockchain, combined with a “semi-decentralized” architecture, solves the bandwidth problem – the exchange is capable to process up to 2 million transactions per second. In addition, owners intend to obtain licenses from several regulators at once (yes, this means that all clients will have to undergo KYC / AML procedures) and ensure high standards of customer service. This, at least, is a very interesting project, but so far the stock exchange is only at the beginning of its journey.

Nevertheless, the very appearance of such a project directly indicates that the cryptocurrency community is gradually coming to an understanding of how to ensure the safety of trading. In addition to the fact that decentralized platforms are gaining more and more popularity – crypto traders are beginning to realize that they need clear “rules of the game” and “referees” which will monitor their compliance.

Arutyun Nazaryan
Editor of bistox.com
and BlaBla.Blog
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