ICNN recently reached out to Altcoin.io about their upcoming DEX. Altcoin.io is preparing to go live with their DEX (Decentralized Exchange) on Ethereum's Plasma platform in Q4 of this year. As DEX's are seeming to become more important for the security of the end-user as we have seen so many exchanges over the years hacked with large amounts of holdings lost. ICNN poses some questions to Altcoin.io to go deeper into why we should be more interested in DEX's and the technology behind them.
Does Altcoin.io trade ERC-20 tokens only?
You’ll be able to trade all tokens eventually but in the beginning just ERC-20 tokens. We’re working on blockchain interoperability, and for tokens based on blockchains which support smart contracts, we’ll write smart contracts that mimic the Plasma DEX on Ethereum. So that means NEO, ETC, QTUM, etc., will be among the first non-ERC-20 tokens we add.
We’ll also be working on other technical solutions for coins which aren’t based on smart contracts, such as two-way pegging. It’s important to keep this whole process trustless.
There are no standards for blockchain interoperability yet, but we’ll keep pushing to make it easy to do a trustless transfer of value from one blockchain to another.
What does PoA (Proof of Authority) mean?
Proof of authority means we have an operator in the Plasma sidechain with the authority to confirm transactions and include them in blocks for the sidechain. To prevent fraud, the operator is regularly checked by watcher nodes that have the power to trigger a mass exit event if they spot anything suspicious.
Simple language explanation: There is one small entity doing all work because it's more efficient than giving everyone the right to do it. However, you can still see what everyone else is doing, and appeal to a judge if you think someone is defrauding you or someone else. In this case, the judge is the Ethereum blockchain, the authority is our DEX, and the watchers are all the people and entities having an interest in the exchange or participating in the system.
What kind of transaction times are expected when moving across the Ethereum network with Plasma?
Plasma is almost as fast as traditional servers while still providing the security of the Ethereum blockchain, which we guarantee with the mass exit mechanism.
Does Altcoin.io have a marketing plan? What events can we look forward to?
Our main marketing strategy is to address the low liquidity among decentralized exchanges. We’re doing this by releasing an SDK to help get other DEXs to get off the ground. This not only gives other projects a huge head start but more importantly, creates a shared liquidity pool to encourage adoption.
Our SDK includes tools to build your own Plasma-like sidechain architecture. This ensures transactions are fully verifiable, customers stay in control of their tokens, and should a breach occur they can exit without losing funds. Transactions take place on a sidechain, so they’re lightning-fast — comparable to the speed of centralized exchanges, but with none of the risk — and this further reduces the risk of price slippage.
If we share liquidity, trading volume and frequency will rise, making digital assets themselves more liquid, and as a result, a more attractive investment. Amateur and professional investors alike will flock to the community, eager to get involved in the exciting projects, tokens, and people solving tomorrow’s problems today.
We’re proud of what we’re building here at Altcoin.io, and we’re ready to share the first version of our SDK with the world: https://github.com/
What problems does Altcoin.io solve or in which way does it differ from Etherdelta, Bitshares, Waves, NXT?
There's never a "silver bullet" to success when starting a company but we believe we're building a decentralized exchange (DEX) with the right approach that can truly outperform a centralized exchange.
We're building a scalable, instant, and trustless trading exchange using a layer 2 Plasma-like sidechain model. Plasma’s goal is to scale the Ethereum network to transact millions of transactions per second (instead of just 10–15) by building a blockchain within a blockchain and removing the need for every node on the network to verify all transactions as they occur.
Considering over ~$750 million has been stolen from other exchanges this year alone, triple that stolen in 2017, we believe there is a strong need for a safer trading environment in the market today. In addition, the decentralized exchange market is open for the taking. I don't think there is a clear winner in the decentralized exchange space by any means when the top decentralized exchange does around ~$1m in daily trading volume and the top centralized exchange does over $1b in daily trading volume.
Is there a token? Was it premined? If so, how is that going to work without an ICO?
At the moment, we don’t need a token. We’ve seen a lot of blockchain startups rush to an ICO without thinking through whether they actually need one, and we’re not adding ourselves to the list. Our goal is to create a safe, fast trading platform with all the advantages of decentralization, and unless we see a need for a token, we won’t be conducting an ICO.
How many products is Altcoin.io going to sell?
We are creating a decentralized exchange and we plan to list 100s of different cryptocurrencies.
What are the costs/trading fees?
We add a small fee to every peer-to-peer transaction we process.
What is Altcoin.io about?
Altcoin.io is a platform for trading cryptocurrency peer-to-peer, without ever losing control of your tokens. If our service were to go down or be hacked, users’ tokens are never in harm’s way. All we do is connect one individual to another. We never assume the custodial risk of holding users’ tokens, nor do we have any control over them.
Our mission is to bring the entire cryptocurrency community together to create a transparent, trustworthy, and honest market. We believe that will help take the cryptocurrency industry from where it is today, which is around a $250-$300 billion market cap, up to a multi-trillion dollar market cap.
We look at CoinBase, an exchange that made $1 billion in revenue in 2017 by making it really easy to buy Bitcoin and a few other digital assets, including Ethereum and Litecoin. What CoinBase did for Bitcoin, we want to do for altcoins. We want to help people trade securely, easily, and peer-to-peer, without ever giving your tokens to a third party.
What is Altcoin.io's focus?
A lot of cryptocurrency exchanges are centralized, which makes them vulnerable to theft. Since June 2011, about 30 exchanges have been hacked, resulting in the loss of billions of dollars in tokens.
As Bitcoin’s value continues to rise, we’re likely to see more of these hacks. These exchanges store digital assets in a centralized reserve, typically known as a “honeypot”, which is a single point of failure hackers love to exploit.
We’re building a decentralized exchange (DEX) that’s both easy to use and removes the single point of failure exposing traders to theft. With centralized exchanges, users’ coins pass through a third party, similar to an escrow account, and this is why hackers target centralized exchanges. All of our trades, on the other hand, are peer-to-peer.
How, exactly, is Altcoin.io going to avoid hacks and server downtime?
Our decentralized exchange will benefit from all the security mechanisms described in the Plasma specification. As for downtime, transactions will be paid for in trading fees, Txs (transaction messages) will have to be authenticated, and incentives will be applied to make it very expensive to spam the Altcoin.io network.
How does Altcoin.io intend to scale to meet demand?
Altcoin.io won’t have the same issues as blockchains today because not everyone will be able to run Altcoin.io full verification nodes. This means consensus will be reached much faster and regular users will be able to contribute to the security of the network by watching and reporting bad behavior to the smart contract.
What is the expected user base for launch?
As of August 2018, we have over 100,000 pre-registered users and at the time of launch, we expect this number to be much higher as we continue to share new developments.
How is Altcoin.io providing anonymity?
As an exchange, we want to comply with government regulations first and foremost. Our goal is to make cryptocurrency trading more secure, so it would be irresponsible of us to assume the U.S. government won’t issue laws around this. We’ll be staying ahead of the curve in terms of legal requirements and how they affect exchanging digital assets. After all, even if we make the exchange extremely secure and give users full control of their tokens if the government were to step in and say we’re not complying with regulations, that would mean we had failed in our security goal. Whatever regulations come, we have a legal team to help us understand what they mean so we’re compliant at all times.
What kind of tools can users expect to have when trading?
We’ll start with the standardizing trading tools such as:
Buy and sell orders
Our vision is to empower everyone, regardless of market knowledge, to trade altcoins securely and with confidence. As well as making trading easy through the design-driven development and working with the community, we want to help inexperienced traders make better investment decisions. How? By including social trading in our DEX.
We’ve yet to see social trading in an existing DEX, and we’d love to be the first to offer it to the community. Not only will it attract and retain investors who’re just starting out, fortifying liquidity, it’ll also make trading more fun, and offer a forum for experienced, influential investors to earn rewards by sharing their expertise.
With exchanges experiencing high waiting times for new accounts and even closing registration, and lack of customer service during times of high cryptocurrency volatility, how is Altcoin.io preparing for such an event to mitigate wait times?
We realize that poor customer service, long wait times for withdrawing funds, and user registrations are among the top issues with centralized exchanges, so we’ll be working hard to address these problems to really create the decentralized exchange that crypto traders deserve.
Is Altcoin.io going to offer the ability to trade on margin?
Upon launch, we will not have the option to trade on margin, but it’s something we’d love to add to our decentralized exchange in the future. In fact, we encourage anyone with ideas on what we should include in our exchange to get in touch.
What are three primary ways Altcoin.io's DEX solves problems that centralized exchanges do not?
We’ve seen countless new decentralized exchanges popping up over the last few months, and this is a great thing. Finally, the market is waking up to the failure of centralized exchanges.
But despite losing their users billions of dollars in hacked funds, centralized exchanges still dominate the market. To compete and really change this market for the better, DEXs must have the following characteristics:
- Instant trustless trading
- A great user experience
- Blockchain interoperability
We originally pursued atomic swaps and smart contracts to address both trustless trading and blockchain interoperability. While we’ve had some success, atomic swaps fail to provide a great user experience for two reasons:
- Transactions can take minutes to be confirmed on their blockchains.
- Users have to pay high blockchain transaction fees.
This constrains trading volume, liquidity, and creates a frustrating trading experience. The community wants security, but not at the expense of transaction speed. So now we’re focusing on building an instant and trustless trading model with an amazing user experience using a Plasma-like sidechain approach.
Why should users choose Altcoin.io over other exchanges with established reputations?
From a blockchain project perspective, we’re kind of doing everything in reverse. We haven’t written a white paper and we have no plans to conduct an ICO. A lot of projects these days create a utility token with the sole purpose of conducting an ICO, but what projects should be doing is thinking more about what utility their token provides. In our opinion, if you have to think about why you need a token, your project probably doesn’t need one, which is why we’ve chosen to avoid the ICO route altogether.
In addition, there’s a kind of a gold rush happening for ICO projects. Unlike other teams, we don’t have millions to burn. This makes us hungrier to find ways to improve organically, as opposed to some project that has raised tens of millions of dollars (sometimes hundreds of millions of dollars). We don’t have the luxury of a 36-month burn rate, vacations included, so we aim to demonstrate value and innovation from the outset.
We want to thank Altcoin.io and their CEO Andrew Gazdecki for taking the time out of their schedule to answer all of our questions. For those interested Altcoin.io is still accepting investors until August 31 with the company having an initial valuation of $7 Million.