On the domestic market, there are currently several bitcoin exchanges that focus on Czech and Slovak clientele – either because they live here or because they are foreign companies for which our and Central European market is attractive. One of them is bitcoin exchange Coingi.com, which recently also allowed trading in pairs of fiat currencies – USD and EUR. For SEPA payments they use accounts in the FIO bank, so they, also with support in Czech and Slovak, target on Czech customers.
I contacted one of the Coingi owners, we talked on Skype and finally, this conversation came out from that:
How to create a new bitcoin exchange
How long have you been working and what was your motivation to run your own stock market?
Coingi has been working for over a year. We started officially in February 2017, when we launched our system only in crypto mode to make sure that everything works without any complications, and at the same time to learn working with cold-wallet and hot-wallet. Since November, we have been operating in full mode with Fiat currencies such as the dollar and the euro. The bitcoin mania in December 2013 brought us to the idea of running our own stock market. At that time we were trading for fun but the exchanges were overloaded and some of them were from our point of view amateurly programmed. This has led us to create something really professional.
Do you have any experiences with such projects?
Not with the Crypto Exchange directly, but with large web projects. Our team is built from people who have many years of experience with sites that have hundreds of thousands of visitors, including running server farms. So this idea to do something really nice was quite clear.
How long were you working on the stock market?
Longer than we originally planned, but that is the case with these projects. Because we wanted to make it really stable and safe, the entire design of the infrastructure was very massive from the very beginning, so it took some more time. The entire Coingi has been created since 2014 and it is being developed continuously until now. We still have many items on the list that we want to implement in Coingi.
What does it mean to create and run such a stock?
More things than you would initially expect if you want to do it right. We wanted our stock market to handle everything, even if there is “panic sell or buy” in the market. That is the situation when thousands or hundreds of thousands of online users are watching the graphs or even trading. It is actually a small DDOS from the exchange’s own users who want to get the current data as fast as possible.
So you have to design it all so that you can endlessly scale your infrastructure ideally into several places in the world, keeping it up-to-date and especially safe.
Coingi supports altcoins, but does not recognize Bitcoin Cash
Some altcoins are being traded on your exchange, but you could have more of them …
Working with the currencies is quite problematic, you have to develop around it quite complicated infrastructure that tries to eliminate bugs that were done by individual developers. There are wallets that work relatively well, but then a lot of amateur-dressed and the developers have left lots of mistakes there compared to the original bitcoin wallet.
One of the worst examples is when you send the wallet a payment order and it does not respond. After some time you try it for the second time and it will answer with a success, but the payment is sent twice. In order to avoid these cases, we had to develop a relatively robust driver around each wallet which monitors the wallet and ensures that such things cannot happen.
And that’s one of the reasons why we do not want to add every possible coin to our site. Every day we get 2 – 3 emails from different developers asking for the addition of their coin.
So you will not add any other altcoin to Coingi?
We will, surely we will. We plan to add support for ETH and Monero, but because they are quite different compared to Bitcoin, we will first have to test how they behave, create a new driver around them and then we’ll finally add them.
Do you plan to support Bitcoin Cash or Bitcoin Gold?
No, we definitely do not plan to add them. We disagree with the philosophy these currencies were created with; we disagree with the philosophy when the currency is dominated by a small group of users for their own profit, so we do not want to support them in any way.
Are you going to offer advanced functions such as Short, Stop-loss, Margin and so on?
It’s a little bit against our perception of trading on the bitcoin exchange, but the competitive environment will probably make us to offer this. These elements, according to our belief, do not belong on the stock exchange but to a broker connected to the stock exchange.
The stock should do well one thing, to work quickly and reliably under all circumstances even in the case of panic buy or sell. Additional services should already be offered by individual brokers. We don’t like the fact that these things started to be implemented directly by the exchanges, but we’ll probably have to accommodate and offer similar things.
In your site you show how much funds you have on the stock market, but there is not much to see in the orders, why is that?
Lots of users hold funds in the available balance and only a small portion of them puts them into bids for sale. We would like to motivate users like our competitors by introducing maker/taker fee so users will offer more.
In which part of the world do you mainly work?
We are trying to focus on the whole world, but a large part of users are from India, Russia, then South America – Venezuela or Brazil and then North America and states of the European Union. This is why you can find Czech support on the web, the bitcoin community in the Czech Republic is after all very strong.
So you run your exchange globally, but where are you from? You only have information about offshore company Business & Capital Ltd.
The information, who is specifically behind Business & Capital Ltd., is not publicly available on the web yet. This is mainly because the legislation in this field is different in each country and often unclear and we would not like to get into problems somewhere. We are now trying to concentrate mainly on the stock market development and we are in the process of preparing for the fight with officials around the world. However, business partners such as Fio Bank, Google, Facebook or Twitter know us. That is something, without what we couldn’t work.
Are you unique in something?
From an outside user’s perspective, we are not much unique. Coingi is very unique with what’s in the inside, the part that the user does not see. How our infrastructure is built, how everything is monitored and supervised. Or how we have everything scaled, including pairing of individual bids. We are very proud of that. I just know that this uniqueness is very hard to present.
How many users do you have and how many of them are from the Czech Republic or Slovakia?
In the first year of operation, we collected tens of thousands users, the strongest was, of course, December 2017, in which we saw hundreds of new users a day. Several hundreds users are Czechs and Slovaks.
Is that the reason why you also have an account at FIO Bank?
We were searching for a suitable bank that supports SEPA payments for the EU and IBAN payments while having a high quality API interface for automatic communication. Finally, we chose Czech Fio, because this bank is able to cover the income of two countries at one time – Czech Republic and Slovakia. That means that both states can send money locally, which another bank has not offered to us.
The security of client’s assets on the stock exchange is an absolute priority
How is your stock secured?
We have put the greatest emphasis on this part. We continually monitor all stock market movements and count on whether the sums fits and we also monitor withdrawals, which users are asking for, if that processes make sense, that means whether the sufficiently large deposits were processed before or whether the users have successful deals. In addition, all incoming payments go automatically to the hardware wallet Trezor, from which only the necessary fund are sent to hot-wallet.
We also monitor from where our users log into the system, if there is anything suspicious… Every moment we are under some kind of an attack that tries login names and passwords. A large number of hackers who get to a stolen database of names and passwords try all these lists to match the bitcoin exchanges if there people have the same passwords. Sometimes they even manage to do so, so I recommend users to use a different email and password on each stock, as well as 2FA – two-step verification.
Another way of protection is their e-mail, where the withdrawals must be confirmed. In addition, we do not display this email in the administration so that a potential attacker has a problem finding out which email the request was sent to. I do not understand the stocks that use their email address as user login; this security element is missing in these exchanges.
You use photos as a verification. The user has to be photographed with the paper on which there is written Coingi and the current date. Isn’t that too much complicated? Did not you consider the Skype verification for example?
Verification on stock exchanges is, unfortunately, necessary evil for every user, who wants to operate with FIAT currency. Bitcoin is the final destination for all scammers who create a variety of fraudulent sites, they are trying to get to people’s bank accounts, or they are scam dealers of all sorts of goods when they collect money in advance. All the money they want to get into Bitcoin.
Another reason is the AML policy and regulatory measures dealing with the fight against money laundering and financing of terrorism.
All these reasons force us to verify the user. We solve it using the photos, on which we want the scanned documents, another document proving that the postal address belongs to the user and the last measure is the photograph of the user together with the document and the paper on which there is written the date and Coingi. The reason is simple; it’s an attempt to avoid sending fraudulently obtained documents on the Internet. If you take a moment to work, you can get somebody else’s documents, who was not precise and uploaded his own document on some public shared server.
We have not considered the Skype verification yet. One option was to outsource verification, but in December, it turned out that this service would be enormously overloaded and that users would be waiting for verification even more than a month. Therefore, verification is currently done by us, so the users can trade for their FIAT as soon as possible.
What are you working on now? What news can we look forward to?
The list of thing we plan to implement on the site is quite long. A couple of days ago, we launched an affiliate support, and in the near future we want to complete the transition to Segwit so it will reduce the fees for bitcoin transfers. Then maker/taker fees, lower fees for bank transfers, and lots of other improvements. If you want to try our services, sign up for Coingi here.