Yesterday, Coinsetter, a brand new forex for Bitcoin announced that it had raised $500,000 in seed capital. The New-York based startup seeks to bring to market advanced trading options that don’t exist in the current BTC market.
The Bitcoin exchange market is already fairly well fitted with numerous exchanges including the extremely popular MtGox, which in the past held over 80% of all bitcoin transactions. Since this is the case, any new forex site would have to show some sort of niche before it could potentially make any headway in this already crowded market.
“Although trading occurs on both the existing exchanges and Coinsetter, we differ from them in many ways,” said CEO Jaron Lukasiewicz in an e-mail with SiliconANGLE. “Our focus is on active traders, and we are bringing new capabilities to bitcoin that aren’t the traditional responsibility of an exchange, such as margin lending and the ability to short the market.”
Currently, most exchanges only allow for limited trade mechanics including the basic “call” and “ask” set prices for buying and selling. Coinsetter intends to bring a far more advanced and mature set of trading mechanics into play and the company expects this will bring on board “active traders.”
Of course, being a Bitcoin exchange nowadays isn’t all rainbows and roses. Due to the ever-increasing value of bitcoins exchanges, online wallets, and other sites that traffic in the cryptocurrency have found themselves in the sights of highly sophisticated hackers looking to steal their wallets. As a newcomer on the scene, Coinsetter would also be putting itself and its customers in that crosshairs.
In the past few months hackers have made ever increasingly guileless maneuvers to capture bitcoins including a particularly daring DNS-hijack attack against BitInstant that netted ฿999 BTC. Later in March, MtGox and Dowalla were hit by DDoS attacks with the intent to help hackers manipulate the valuable currency.
“Coinsetter will be a huge target for hackers,” says Lukasiewicz, agreeing with this sentiment and the dangers posed to Bitcoin exchanges. “Really smart ones at that. Security and protecting customer’s funds is our absolute highest priority, and we will be releasing more information on our security procedures closer to launch. In the meantime, we are taking the capital we’ve raised to put a lot of manpower behind our development and have several people conducting code reviews.”
It took a massive hack in 2011 for MtGox to mature and think more clearly about security and many exchanges, wallets, and payment processors have now been scarred into veteranhood by their time in the marketplace. Coinsetter will be wading into deep water; and it will be interesting to hear how the company intends to fend off attacks, especially what sort of strategy is in mind for deflecting or absorbing distributed denial of service.
Currently, Coinsetter is preparing for launch and will be offering invitations to beta users; but the final launch date has not yet been announced.