Toward a Better Cryptocurrency Exchange Part I
We’ve witnessed explosive growth in cryptocurrency markets over the past couple of years, and in response, the rise of the digital currency exchange. These early versions of exchanges, however, are plagued with a multitude of issues. There are four general categories in which we can see major improvement for the exchange community. In the coming weeks, I will lay out the basic areas in which exchanges can (and should!) judge their performance.
The fact that hundreds of thousands of users put up with massive problems speaks volumes about the current situation in the market. People don’t have a choice — at least not great choices. People are simply left to settle for the lesser of two evils and hope for the best.
The fact that hundreds of thousands of users put up with massive problems is actually a testament to the resilience, positive attitude, and good nature of our enthusiastic community. So that’s cool. And yet, at the same time, those of us on the service-provision side of things definitely have opportunities for improvement.
What I’d like to do in this series is lay out some basic areas in which exchanges can (and should!) judge their performance. Maybe in the future, the exchange community will develop a standards body (The Better Business Bureau of the exchange world) to help us remember these things and to grade ourselves. But all great things start small.
Another philosophical note: Decentralization technology is giving us in some way the opportunity to circumvent traditional regulators. I think this is a good thing, not because we shouldn’t have regulation or standards, but because we can self-regulate better and more efficiently than an external party. However, to actually walk-the-talk, we have to come up with some better (which in case some cases means more stringent!) regulations than what “They” would have imposed on us, right?
Room For Improvement
There are four general categories in which I can see major improvement for the exchange community:
Trust
Reliability
Usability
Democratization
Trust Is The Basis
For financial transactions, trust is a basic guarantee and one that governments have spent a lot of time on, making regulations to prevent people from getting fleeced, ripped off, mugged, or otherwise stolen from. In some ways, it’s the most important area of improvement for an exchange and the most surprising that so many people are willing to play with exchanges who have not established trust.
It gets really ironic when you consider that the whole motivation behind the decentralized currency movement was to keep our money out of faceless centralized institutions (banks) that we didn’t trust at all, even though they had been around for decades (or hundreds of years). And now, we’re all trusting faceless centralized institutions we know very little about — maybe not even who started them or where they’re located in some cases!
We’ll try to establish metrics and standards for: transparency of balances and reserves, front-running and fairness, clear policies, general security practices and audits, demonstration of owners’ and developers’ commitments to the community.
Reliability Is A Must
While trust is fundamental to the choice of doing business with someone (or some exchange), reliability strengthens the relationships and keeps people coming back. Many exchanges melt under high traffic situations, lock participants’ coins, take weeks to respond to customer service requests, or seem to have replaced customer service reps with low-functioning chatbots. Again, in the non-exchange world, these business practices would be considered laughable, unacceptable, or worse.
We’ll suggest metrics and standards for: customer service response times, liquidity, scalability, accessibility during extreme conditions
The User At The Center
Trust and reliability allow us to relax; Usability allows us to enjoy our experience. Oftentimes, when teaching people how to trade, I’ve encountered usability so bad that I gave up or switched to a different exchange to avoid all the confusion.
We’ll talk about: UX, tailoring the experience to the investor, communication, helping people sort through hype, encouraging good security practices, protecting investors
Participation As The Future
Once we can nail usability alongside the basic guarantees of trust and reliability, we’ll be on par with many other industries. But I think the fundamental innovations of our tech stack (blockchain, distributed ledgers) not only allows but also pushes, us to go further. We have the infrastructure to decentralize decision-making, increase participation, and give credit (and rewards) to those responsible for creating the value in our businesses: our members.
We’ll brainstorm best practices around: decentralized decision-making (voting), dividends and buy-backs, members vs. users.
This is my overview of what I’ll be outlining over the next couple of weeks. Of course, our Exchange, Tradebits, will address all of these issues (even the Participation ones!). When we’re up and running, we hope you’ll grade us by the metrics we develop!
About Tradebits
Headquartered in The Hague, The Netherlands, Tradebits is building the digital currency trading platform for the next 100 million users. It is the most high-performance, flexible and reliable digital currency exchange platform, capable of scaling and handling an unparalleled number of users and transactions per second and adaptable to the skill level of any trader.
Tradebits uses the same principles that power and secure the world’s most demanding stock exchanges. One of Tradebits’ hallmark features it it’s configurability to match the sophistication level of every cryptocurrency trader. Users of the exchange will have access to 24x7 live customer service as well as a myriad of 3rd party trading apps and resources through the Tradebits Marketplace. Tradebits gives back to its community by using 40% of all trading fees for the continuous purchase of XBITS tokens across various exchanges to generate upward price pressure.
Join the discussion on our Telegram channel: https://t.me/tradebits_exchange
Read our whitepaper: https://tradebits.co/whitepaper
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More info: tradebits.co
Author: This article was written by Waseem Sadiq, CEO at Tradebits #exchangedisruption #crypto #bitcoin