Interview with the creators of p2p exchanges HodlHodl
The reader is offered an exclusive interview with max Kaidun and Roman Snitko, CEO and CTO peer-to-peer exchange HodlHodl.
HodlHodl — peer-to-peer exchange for trading bitcoin and Lytkina with neostalinism storage means. The main differences from analogues of the exchange, like LocalBitcoins, is to support multisig contracts, application SegWit and Bench32, low commissions and decentralized storage of users ‘ funds.
HodlHodl working on cryptocurrency market on 23 February 2018 and growing due to “word of mouth”, as the creators of the exchange is a fairly low-key marketing position, adhering to the principles of cryptoanalysis and work with a narrow range of advanced and financial-literate users.
Team HodlHodl prefers to follow the path of innovation and creation bitcoin community, conferences on the prospects and strategic development of Bitcoin and invites the participation of well-known bitcoin figures and developers. This year, as last, HodlHodl are the main organizers of the traditional and very important for the community of Honeybadger 2018 Baltic conference in Riga.
BN: many sources HodlHodl is positioned as a decentralized p2p exchange. Whether Your market is decentralized or is a misconception?
HodlHodl: We have already refuted this misconception. HodlHodl provides only the decentralized storage resources. But if we talk about pure decentralization, then, unfortunately, we can’t be called decentralized platform, as we have a centralized server is our web application (client-server application).
Although HodlHodl included in a list of decentralized shopping areas, we give access only one component of a distributed trade — neoscopelidae storage means. Not to confuse enthusiasts of decentralization, we decided to abandon the use of the term and not to focus on this aspect in the context of our service.
BN: Tell us about the algorithm of transactions on the stock exchange HodlHodl. How is the security?
HodlHodl: For each performed on the exchange transaction creates a unique multisig-escrow address in the public bitcoin/litecoin-blockchain with 2 keys: one available to the seller of the cryptocurrency, and the second exchange. This ensures safety in the event of breaking of the exchange, as to withdraw funds that are in the process of trade, the hackers will also have to obtain access to the user key.
To withdraw money from the escrow account, the user also needs to enter the payment password. Signature transaction the stock exchange at the same time, in case of confirmation of user of execution of the terms of the transaction, is carried out automatically. In the event of conflict, refund is not performed, and are operators of the exchange to conduct their own analysis of what happened.
BN: What country at this stage provided the highest trading volume on HodlHodl? In what country is Your exchange the most popular?
HodlHodl: On HodlHodl was quite a lot of users from Russia, the main demand for the service is in Europe, as it is dominated by offers for European payment processors and banks. And, surprisingly, our service is quite popular in South America. Recent analysis of trading activity showed that our service was used by residents practical each region of the globe. The total volume of trading since launch has crossed the border of 1000 BTC.
Logging on to the service, you may not find a huge number of applications for the purchase or sale of bitcoins in Your area, as users are actively using the functionality of “working hours” indicating the time information when they are available to participate in transactions. That is, if a person is comfortable to trade only from 9:00 to 12:00, and his proposal will be on the website only at this time. But do not be afraid — in the absence of a time interesting for You offers, your own offer, and You will definitely find interested in the transaction side.
BN: what is Your position on traditional methods of promotion and advertising of the product?
HodlHodl: such Is the nature of crypto-currency business, and yet few understand. Attempt to promote cryptocurrency startup standard methods will lead to the inevitable failure of users suspected look at every new project, is haunted by them everywhere. Advertising bitcoin exchanges to search engines, social networks or through banners automatically causes a negative impulse and does not cause interest. In our opinion, it is a waste of money. Information about trading platform specializing in cryptocurrencies needs to be heard otherwise — is a really useful product should provide the community and its prominent representatives. So we try to spend quality bitcoin events and meetings, focusing on community development, the development of technology and awareness of people about Bitcoin itself.
BN: You are surely aware of the opinion Vitalik Buterin about centralized exchanges, which the Creator of Ethereum recently wished to “burn in hell”. Centralized trading services nevertheless continue to dominate the market of cryptocurrencies and not hand over their positions. What, in Your opinion, associated difficulties of the development of decentralized platforms or platforms such HodlHodl that provides distributed storage of funds?
HodlHodl: first centralized exchanges provide high speed and frequency of trading as a specific engine for automated matching sellers with buyers is a determining factor for day traders.
Secondly, not all people are yet aware of the importance of security trade decentralized and distributed storage resources. Not all also understand that by sending the money to the address of the centralized exchanges, users, in fact, pass them to somebody else and trust the security of the accounts to third parties. The majority of users still willing to keep most of their cryptoperthite it on exchanges, and not see the benefits and the meaning of alternative technology platforms, offering a different approach to savings and exchange.
Third, centralized exchanges simply more. Also some of them offer a fairly convenient and simple interface. The choice of decentralized exchanges is limited and their instruments are pretty complex for the average user. Creating our p2p platform, we tried to make it as simple as possible even for a human, never had to deal with the purchase/sale of cryptocurrency. If You look at LocalBitcoins or Bisq is quite complex for communication services with a mass of difficult to understand items.
To summarize, I can say that I see no problem in joint co-existence of decentralized and centralized exchanges, which are complementary and serve different purposes for traders.
Looking at the statistics of our service, we see a growing number of users, offers and trading volume, from which we can conclude that bitoun trading moving in the right direction. Awareness and financial literacy of bitcoin users is growing every day. Also people are starting to think about the benefits of decentralized sites every time there is a loud robbery of a particular exchange.
BN: What are the future plans for the development of Your exchange?
HodlHodl: We are actively developing OTS-desc (platform OTC trading) for large institutional trades. For traditional brokers and investors wishing to trade bitcoin out of the market, a very important mechanism custodians and decentralized storage of their funds. Participants volume of transactions is much quieter to answer for the safety of their funds rather than entrust them to third-party services, especially in such turbulent exchanges for the time when the majority of hacker attacks in the world aimed at cryptomelane markets. The OTC market is a significant advantage over stock market, which is in huge volumes and the high degree of concentration of the contact persons — the-counter bitcoin market at the moment is very narrow and limited. Because of this, in the presence of certain relationships that we hold, information about the current OTS-deske among potential customers apply quite rapidly.
We also create new, more secure form of multisig addresses for the OTC site, which involves the distribution of keys from a wallet between seller, buyer and broker. This type of Deposit box will allow, in the event of a dispute, to send funds to both sides: the seller and the buyer. Under the confidential trades buyers and sellers is very important to be able to send bitcoins to his side in that case, if the debate is closed in their favor.
In addition, we are launching their own broker-dealer — exchange intermediary carrying out orders of large clients on investment management.
By the way, HodlHodl already has such functionality as a “private offers” — anyone can publish your offer in the enclosed sheet. Access to this offer you can get only the link — this greatly increases the level of privacy of the transaction. The proposal has a very high demand.
In parallel, we create a new product HouseHodl platform for the sale of movable and immovable property for money with the use of escrow accounts. On this platform it will be possible to place ads and remotely sign required for registration of the transaction documents.
Our goal is not to move the real estate market on the blockchain at this stage of development, in our opinion, it is utopian. We’re just trying to create a convenient platform for the purchase of property and means of luxury for bitcoins, all other processes occur in the framework of the law and the usual procedures for the conclusion of contracts and registration of property rights.
BN: How has Your relationship with the financial regulators?
HodlHodl: fortunately, the regulators we have not yet addressed. We do not provide processing services to funds and do not hold assets in their accounts we just provide a technical solution for the interaction of buyers and sellers to each other. In the future, when HodlHodl will be added to multi-contracts with three keys, in 95% of cases we will not even participate in the transactions. For registration of users on our exchange need only e-mail and password, so we even if you will not be able to accompany the Supervisory authorities any valuable information about customers of our service.
However, the service still has the option to verify the identity and procedures KYC/AML, if the user wishes to obtain a reduced fee (which currently is 0%) or a badge in the profile about the passage of verification.
It is expected that the attention of regulators HodlHodl will draw after the opening of the OTS-deska and broker-dealer, but we are fully prepared to follow the requirements of the regulators. Moreover, clients interested in these types of trading will be fully open to maintain a transparent exchange activities.
BN: How are things with added support for Lightning Network? How do You see the best option of this technology (LN) in the context of the service HodlHodl?
HodlHodl: Indeed, as many in the bitcoin community, we are actively exploring and testing the technology, but we believe that it is too early to talk about adding support for Lightning Network. The main problem of LN at this stage is the presence of possible security holes in the implementation of the transaction – if in the course of tests such vulnerabilities would not be identified, we will immediately begin the integration of the Lightning. This is a very interesting and promising technology but until it is in the early stages of development, it should exercise extreme caution, as the early integration of immature technologies an easy entry point for hackers.
From our point of view, over time, in the process of increasing the value of the bitcoin will continue to grow and Commission a network that will push users to conduct more smaller transactions on the network Lightning. Also one does not exclude the need and demand for exchange transactions of small amounts in bitcoin, be it $20, $50 or $100 instant and cheap exchange of small amounts and is a Prime example of the use of LN in the framework HodlHodl.
BN: Now the service is available to trade bitcoin and Fiat lithiom with different pairs. Will you consider adding support for other cryptocurrencies on HodlHodl?
HodlHodl: Here the situation is the same as Lightning. To us is often approached by developers of a new cryptocurrency with a request to add them to the “listing,” but we are not ready to work with immature and untested projects, as it is fraught with the point of view of security of transactions. Even old projects are subject to attacks 51%, and we don’t want to put our clients in a position where their transactions can roll back the attackers. With regard to the time-tested crypto, we may add some, but certainly not this year.
BN: How do You feel about Bitcoin Cash?
HodlHodl: just as to regulators – all. This fork is absolutely in a parallel universe from us. We spoke with representatives of this project. Also the prospects of adding BCH we have hinted to some potential investors interested in the currency. But our audience, if you add this alcaina, we just do not understand. We also do not really believe in Bitcoin Cash. We are primarily confused by the lack of professionalism of the developers of this fork and full centralization of the network itself.