We sat down with LakeBTC recently to find out what it was they were working on – here’s what we spoke about…
First of all, tells little bit about what LakeBTC is all about.
LakeBTC: LakeBTC was started in March 2013 as a bitcoin exchange. The founding team came from financial industries and most of our early users were seasoned traders and other financial professionals from prop and flow desks of hedge funds, investment banks, and commercial banks. The years of experience trading bonds, currencies, commodities, equities, and all types of derivatives and structured products helped us build a solid cryptocurrency exchange you see today.
Later that year, we decided to incorporate and run the exchange under the current name. Our investors, users, and naturally many of the people we recruit have extensive financial experience, and this is one of the most important differences than other players in the field.
A few months back somebody asked me there are so many exchanges out there, what makes LakeBTC special. I said:
“We know what we are doing.”
People may think I was joking, but you have to realize that what really matters to a bitcoin exchange is risk management and internal controls. And, you don’t learn these overnight.
The bitcoin space is growing fast, where do you see LakeBTC fitting into the overall infrastructure?
LakeBTC: There are quite a few players in the bitcoin ecosystem: miners, investors, merchants, consumers, payment processors, wallet services, funds, speculators, brokers, exchanges, and so on.
First of all, pricing is the most fundamental cornerstone of the entire infrastructure. LakeBTC’s vision is to provide a fair marketplace for bitcoin price discovery. To that end we have market surveillance programs, products such as darkpool order types, anti-orderbook attack, and being conservative about altcoins and leverages such as margin/short trading, futures, and options.
Secondly, LakeBTC strives to create an efficient market with abundant liquidity so different users are likely to find counterparties at any time. We see a rapidly growing number of active users, and there are a number of professional arbitragers and institutional investors who take advantages of our trading APIs to help make the market and inject liquidity to our exchange.
Security is crucial to all parties and the entire bitcoin industry, and LakeBTC takes security very seriously. To protect user’s fund, we implemented a number of rigorous mechanisms including SSL encryption, cold storage, 2-step verification, SMS withdrawal confirmation, trade notifications and so on. But more importantly, we have high level risk management and internal control system. Moreover, we do our best to stay compliant with applicable financial laws and regulations to contain policy risk.
Is there anybody at the company that are users may be interested to hear are involved?
LakeBTC: Our team and investors are all experienced in the financial industry, what makes us different from the other players are that we are all financial professionals, most of us have years of experience in commercial banks and investment banks. They are all familiar with risk management and internal controls.
All bitcoiners should realize that it’s not just another IT company before sending money to an exchange. It’s not just another website or iPhone app. It’s a financial firm that a couple of computer geeks in their 20s cannot do right in a garage. This industry is currently not regulated by Fed Reserve, SEC, OCC, CFTC, or PBOC so users should do their own homework and find out the team’s expertise in financial risk management. This is exactly what makes LakeBTC stand out of the crowd.
As a Big Four exchange in CoinDesk BPI (Bitcoin Price Index), LakeBTC provides excellent liquidity to individual investors, institutions, merchants, miners, exchangers, market makers, arbitrageurs, funds, and professional trading firms. Besides, LakeBTC is a Gateway Member of IRBA (International Ripple Gateway Association).
Additionally, LakeBTC is part of a number of important bitcoin indexes, including that of TeraExchange (CFTC approved bitcoin swap), WinkDex (pending), among others.
LakeBTC price is also listed in a number of industry leading sites such as BitcoinCharts, Bitcoinity. Our exchange and features are featured at major bitcoin news sites at LakeTrader (CoinDesk), Ripple Deposit(CoinDesk), CoinDesk BPI (CoinDesk), LakeBTC CEO Interview (CoinTelegraph), and of course NewsBTC.
How does the technology work?
LakeBTC: SSL encryption, cold storage, Google Authenticator, SMS confirmations, etc. are several technical measures we currently employ. We also constantly improving our tech infrastructure for higher throughput, tighter security, and better availability.
But people have to realize that a Bitcoin exchange is not only a technology company, but more importantly, also a financial one. Technology is important, but it’s not everything. The processes, department firewalls, mentality, and the people behind it are what really matter.
Where do you see bitcoin in 10 years – first in terms of value and second in terms of where it will fitting into both online and off-line commerce?
LakeBTC: As an exchange operator, I’m not in the position of price prediction or investment advice of any kind. It’s subject to conflict of interests or market manipulation in some sense. Our job is to make sure the marketplace is fair, efficient, safe, and liquid.
Besides, I really have no clue where the price will be tomorrow, not to mention in 10 years. If I did, you’ll see me running a hedge fund making tons of money, instead of an exchange earning a very thin commission fee here. A year in the bitcoin world is like 50 years in other capital markets. Maybe we will have a better idea when we introduce futures contracts with 10-year maturity like Euro-dollar futures in CME.
However, since I’m devoting my time and efforts to this bitcoin industry, you can tell I’m bullish overall. Blockchain is a great innovation and it surely will change the world in many ways. Bitcoin will not die, and it’s unlikely to be taken over by other altcoins. In the five years since its inception, the development of bitcoin is always accompanied by large swings. The volatility and the speculation help bitcoin building value rapidly.
Bitcoin is more like an asset class or commodity than a currency, since to a currency, price stability of bitcoin is particularly important. Another thing is confirmation time. A possible solution is to introduce centralized payment processors to the de-centralized bitcoin system.
In general the value of a currency will increase as more and more people get to use it. We are optimistic about the future of bitcoin as LakeBTC is committed to provide an even user friendly and secure platform for users, we are confident that bitcoin will play a more important role both online and offline commerce.
What, as bitcoin enthusiasts, should we be doing to get ourselves prepared for this future you speak of?
LakeBTC: There is a theory out there that people who know of bitcoin will love bitcoin, so we as one of the bitcoin enthusiasts, it’s our duty to speak up and get your friends to understand and use bitcoin. From time to time LakeBTC also have campaigns and give out free bitcoin to encourage new users to try it out.
How can our users find out more about your technology/service?
LakeBTC: LakeBTC.com is obviously the first to look. LakeBTC works equally well on mobile devices and desktops. Also try out our LakeTrader, a professional trading tool with professional charting, live data, and OneClick Trade.
Medias like CoinDesk, CoinTelegraph and of course NewsBTC are great sources of our vision, opinions, and latest developments. We are active on twitter, linkedin, forums and online blogs. And feel free to email us and our customer support team will be happy to help.
Is there anything you’d like to add?
LakeBTC: We are dedicated to building a Bitcoin platform with top security, excellent liquidity, and extraordinary customer service. As crypto currencies gained more and more exposures to the general public, LakeBTC is becoming one of the best Bitcoin platforms around the globe. Our years of risk management and internal control experience in financial industries build the most solid foundation for ensuring customers’ fund and privacy being safe and secure.
Additionally, creating a fair and efficient marketplace is also important to protect investors’ interests. We do everything in our power to minimize market manipulations and unfairness. Market surveillance program, carefully designed products, comprehensive risk management, and strict internal controls are all meant to make sure this young and energetic market be fair and safe to every participant. At LakeBTC, users are best protected from financial predators, bitcoin theft, online fraud, market manipulators, trader errors, bot bugs, and flash crashes. We provide the same level of service to all users at all times. All users are treated with the same policy published on our website.
Thanks for your time!