What Problems InziderX is solving!?— InziderX Exchange
Hi, in my previous article, I explained the “Philosophy” that surround the birth of InziderX and also dissected the whitepaper starting with the “Abstract and Introduction”.
In this article, I want to dive further into the whitepaper and explain the “Market Condition” that motivate InziderX creation. What problems InziderX P2P Exchange is solving!
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Market Review
The latest advances in blockchain technology are really interesting. Developers wearing t-shirts with unicorns, lamas and flying saucers have kindly given us smart contracts.
Several atomic swaps between blockchains have already been made without the intervention of a third party and the Lightning Network is already in use.
Everyone is talking about it but we are still without a reliable solution for actively or algorithmically negotiating digital assets in a secure environment and with professional tools.
The next revolution will be moral and blockchain technology gives us a new tool to move towards this reality.
Satoshi was kind enough to solve the double-spending problem, smart contracts allow consensual execution without the intervention of a third party, atomic swaps allow the transfer of value between different blockchains and the Lightning Network instantaneous transfers to low costs.
The next step is a decentralized liquid exchange with smart contract and able to perform atomic swaps and thousands of transactions per second without friction.
An analysis of the situation reveals the flaws of the centralized exchange system in place.
In a way, the exchange of centralized digital assets is already closed, it is only a matter of appearance if not time. Given the past problems and their inability to compete with what is coming, they have no future.
We must still give them credit because from 2009 to date, the emerging market of digital assets was one of the most risky. Risky for the user but also for the exchanges themselves : from the legislative, technological and financial point of view. The entrepreneurs of these exchanges gave users first access to this market. We must be grateful to them.
Beautiful trading platforms were set up providing liquidity and respectable Bid / Ask spreads as well as advanced tools such as margin trading and margin financing.
Unfortunately, the solution currently in place does not meet the expectations of a more experienced clientele, if not even the novice user.
Who has not seen the value of his trading account reduced by one third, if not disappearing entirely, after a centralized exchange was “victim of a hacker”. A new week, a new hack in the amount always more impressive.
Objectively, the security of centralized exchanges of digital assets is undeniably inadequate.
What to think about the daily withdrawal limits, otherwise to be asked to pay income taxes at withdrawal of the values of the exchange, without an objective assessment of gains / losses, otherwise suffer the refusal of withdrawal. By 2018, all exchanges based in the United States have become obsolete.
The list of unacceptable situations is exhaustive and disconcerts the most informed negotiator.
- Weekly hacks of increasing value, ever more impressive
- A popular exchange closed for 72hrs in a 24/24h active market
- Identity checks not answered more than 3 months after the request to open an account
- Automatic withdrawal errors in the bank account users who cause them difficult situations
- The demand for astronomical initial deposit
- Too much leverage in CFD product or no margin leverage in spot.
- Quotes freezes, erratic price movements that trigger the stop orders to quickly return to the price of entry
Negotiating on these centralized exchanges is putting users in a hostage position. Not to mention their tyrannical power to list, delist or deny a digital asset in a purely arbitrary way — Bitshares.
And despite their attempt to make their platform user-friendly, most of these exchanges don’t include the necessary tools for active negotiation or with algorithmic.
The presentation of charts and analysis tools is mostly of poor quality, types of orders are insufficient and their presentation confusing. These platforms are in fact the amateur replica of professional tools.
In the best of all possible worlds, a decentralized exchange settles this security gap that hurts centralized exchanges.
Some initiatives have already shown interesting results. The Bisc, Bitshares and Komodo decentralized exchange platforms are excellent examples.
Bisc allows the purchase of digital assets by bank transfer, Bitshares can perform 100,000 transactions per second (more than Visa and Mastercard combined) and Komodo allows atomic swap — the transfer of values between different blockchain.
Without naming the other ingenious features of these platforms, they are a second, non-negligible step towards a secure digital asset exchange system that is efficient and reliable for its users.
What is missing if all the pieces of the puzzle are in place ? In fact, these decentralized exchanges have a great weakness : their liquidity.
If one dwells on the study of these exchanges, this fact becomes simply obvious. It is not really possible to actively trade the BTC / USD with a Bid / Ask spread of $ 200 otherwise a “slippage” of more than 4% on the entry price because of lacking volume.
There is no discussion on this point and the latest ICO of decentralized exchanges do not explain how they will solve this major problem. It’s the elephant in the room.
This is not to mention their business choice to offer anyone the opportunity to create their own token on their platform in less than 5 minutes. This approach only worsens the situation of lack of liquidity by diluting the list of marketable assets presented to users. A real “free-for-all”.
That’s why other notable solutions of decentralized exchanges presented under the model of ERC20 token are not really interesting, even with a respectable trading volume. Moreover, it is practically impossible to evaluate the value of an asset when the pair is established with a “house” token.
A small group of “blue chips” digital assets is preferable for active or automatic trading.
Unfortunately, despite the undeniable improvement in security, decentralized exchange solutions have not yet met the needs of actives and algorithms traders.
Tempted into active or algorithmic trading in the digital asset market has become a painful and risky experience. And volatility is not the main cause of this risk.
Centralized exchanges are no longer a solution and decentralized exchanges do not meet the real needs of negotiators.
What option do they have left ?!
The concept of ideal exchange is clear, it just has not been applied yet. This is understandable because it was necessary to wait until each piece is quietly and ingeniously thought, invented.
Our recognition for its developers is limitless.
Despite the opening of several decentralized exchanges to innovative concepts, the world of digital assets still lack basic infrastructure to establish the pillars of tomorrow’s market. Mass education, the establishment of a user-friendly wallet, safe, liquid and quick turnaround — there is still much to be done.
InziderX will do its part by providing active and algorithmic traders a secure exchange that combines advanced negotiation tools with the latest technologies.
Our Vision
The solution is the InziderX exchange that our team plans to put in place.
Our mission is to create a decentralized exchange that is easy to use for novices but primarily for actives and algorithms traders with all the right conditions for executing their strategy.
A decentralized, wallet-based exchange (Dapp), which is liquid and whose graphical analysis platform includes all the most advanced tools of its domain.
In fact, InziderX wants to become the sensible choice if not the only logical option for the elite actives and algorithmics negotiators. Our focus will always be on the quality of the tools available, the execution and the liquidity of the order books.
The time for a change has come, digital asset traders have experienced too much disappointment to remain hostage of centralized hack exchanges and arbitrary changes in government legislation.
InziderX wants to be the OTC exchange where we negotiate between insiders, anonymously.
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In the next article, I’ll cover in more detail the exchange characteristics — now that we know what problems InziderX P2P Exchange will solve!
InziderX CEO