As has been hinted we've been busy these last few weeks preparing a new crypto-securities exchange for CIPHERMINE and several other securities! Some details are below, and I'd welcome the community's input. We want to make this the best exchange service out there and to provide a resilient, long-lived platform on which the crypto-securities economy can flourish.
We are going all-out for scale and fully intend to dominate the crypto-securities market. We have secured over $100k in seed funding which during the early months is being spent on legal fees, staffing, software development and security (pen tests etc). Post-launch the remainder of the fund (at least half) will be spent on an aggressive marketing and sales campaign. We shall be IPO'ing CipherTrade itself on its own exchange to give everyone an opportunity to join in our vision, and to raise further funding to continue to expand rapidly.
Further, we have identified a hugely exciting target market outside the usual crypto-security space. I don't wish to weaken our competitive advantage by sharing too much, but suffice to say we fully intend to be "main stream".The team
This is a collaborative effort between the following people. Executive team and staff:
- woodtech - me, a multi-award winning British entrepreneur, founder and CEO of CipherMine and Memset Hosting.
- Si (not on the forum) - founder and CEO of [http://zone.in]Zone.In[/url], and our lead developer
- evilscoop - my right hand man in cipherspace, and operations manager for CipherTrade
- analbeard & Ross (not on forum) - two of my top systems administrators at Memset (Ross is on our home page).
Advisory board and investors:
- krypto - one of the biggest alt-coin "whales" and a former major shareholder in Litecoin Global.
- Deprived - the hugely respected and knowledgeable manager of several cryptosecurities on BTC-TC and LTC-G
- Benny - alt-coin and mining guru, founder of BUY-A-HASH
- OgonDark (on bitcointalk), a futures broker with decades of experience, and founder of BTCFunds
Note that CipherMine is also among the "investors", or more specifically CipherMine shareholders. We've yet to work out exactly how much / what ratio but all CipherMine shareholders will get a little slice of CipherTrade.
We also have a number of issuers from who have committed to listing on CipherTrade. Some of the securities we expect to have from the outset include:
- CIPHERMINE, CIPHERMINE.B1 & CIPHERMINE-PT
- DMS.MINING, DMS.SELLING & DMS.PURCHASE
- LTC-CHARTS (cryptocoincharts.info)
We're in talks to get some of our favorite providers like multipool.us on board as well. Note that the exact roles in this are finalised (we've not signed contracts and such). Deprived is still considering the level of his involvement for instance.Features at launch
Ability to trade the following cryptocurrencies with the lowest trading fees on the market:
- Bitcoin (BTC)
- Litecoin (LTC)
- Primecoin (XPM)
- Namecoin (NMC)
- Peercoin (PPC)
Note that the above list is just the ones we're sure about. We will likely add others. Also, all possible currency pairs will be tradeable. The rough plan is to have a market for every coin, under which you'll be able to see all securities as well as all other coins. You will then be able to drill down into one coin or security within that market to view charts and trade etc.
Ability to create securities which can be sold to users of the site for any of the above cryptocurrencies. Initially we'll be offering the following types:
- Profit share - what it says on the tin
- Fund - a managed portfolio
- Bond - a fixed yield instrument, with the underlying capital redeemable by either party (on specified terms)
- Loan - an interest-bearing instrument which is progressively paid down over time
It will be possible for site users to trade contract shares after their IPO as well of course. We will be sharing the trading fees with security issuers.
Other features planned from the outset include:
Planned features to be added later
- A fully live AJAX-driven site (ie. more like Cryptsy than BTCTC/LTCG so you don't need to reload pages)
- A chat/trollbox integrated - similar in style to mcxNOW or BTC-E
- An integrated forum focused on crypto-security discussions, with a sub-board for each security
- Automated import of securities from LTCG/BTCTC using shareholder reports, including creation of all shareholder accounts
- Top-notch customer support and service provided by full-time staff
- A highly-scalable architecture for consistent high-performance, low-latency trading
- API which replicates the functions of LTCG/BTCTC
- No withdrawal limits nor delays
Regulation and compliance
- Option trading
- Time-limited orders
- Automatic coin trading (auto-selling facility like Cryptsy)
- Facility for motions / votes to be created, with a fair and enforced policy applied to all
- Portfolio sharing (for funds)
- More contract types
- Paybans for the trollbox, similar to mcxNOW's
The most important feature of CipherTrade is that we are working hard to ensure that we're going to be around for a very long time. We have engaged BDO as our lawyers and are progressing discussions with them. At this time the regulatory environment in the UK, where most of us are based, is fairly relaxed about cryptocoins.
At this time we don't believe that we need to be regulated since BDO's view is that cryptocoins are probably "beans" or vouchers under UK law. We would therefore be operating a sort-of barter and contract brokerage service.
However, our intention is to operate in a transparent manner and work with the relevant authorities to comply with any necessary regulation. There is a good precedence for this in the UK; our online gambling industry worked with the authorities rather than try to be surreptitious and as a result we are world-leaders in that space.
My team and I are expert in compliance, and looking ahead we'll also be implementing a security and quality standards to ensure the best management systems as the business grows.
We also feel that it is important to maintain the integrity of the exchange, and to that end we will be including basic due diligence as part of the process for approving new securities. It will be possible for security issuers to be anonymous from their shareholders if they wish, but not from us. Shareholder contracts shall be deemed as legally binding - it is not a "game".Where we're at
The software development for the new site is at an advanced stage. We have a stateless trading engine in the webserver with locking handled by the DB - unlike MCXnow we only lock what we need.
We've paid a lot of attention to race conditions too, for example withdrawing when you're involved with a trade.
The replica of the BTC-TC/LTC-G API is coming along very well. It already supports all of the following:
- authentication / authorisation (with 2FA)
- ability to list, update and delete a security
- ability to list shares in a security
- ability to trade between any pair of coin types the webserver is told about
- ability to trade in securities
- seeing your own historic transactions
- withdrawing coins
- depositing coins
- ability to pay out dividends
Only bits of API yet to come are publishing chat, notifications and new trades; being able to pick your security orders by coin; and testing of being able to see your past transactions for securities.
The biggest piece of work that remains is getting the GUI slick and pretty. We're actually sub-contracting that bit outside the main team, but thanks to the work on the API it is proving easy to progress.
We will soon be starting penetration tests with our CHECK-approved partner, Encription
. Obviously security is paramount so we want to ensure we've rattled all the latches before public release. The site itself will be hosted on Memset's ISO27001-accredited, CESG (the UK's NSA) IL2-certified infrastructure platform.What we'd like from you
We are still a few weeks from launch; we don't want to rush and push out a premature product. This means that there is an opportunity to influence the final service and to that end we would value input from the community. Let us know what you think!