Bitcoin Forum

Hey everyone,

I'm a long time lurker and a big fan of bitcoins. I come from a heavily financial background (I was previously an investment banker and in private equity at J.P. Morgan and other companies) before leaving to start a company I'm really passionate about, which is a levered forex trading platform for bitcoins. Our big focus will be on security and transparency, on top of creating a best-in-class platform and professionally-run company. I want to get feedback from the community before we go into beta to see if there are any neat features we can incorporate and also start answering some of the tough questions you're going to have or find that we need to come up with better answers for. So I welcome any and all feedback.

We are in development and will launch in beta late February/early March. If you're interested in receiving an invitation to our beta, you can sign up via our contact form at www.coinsetter.com.

In the meantime, here are a couple of cool screenshots from our site! Please note that we are using dummy numbers in certain spots, so a few calculations don't tie .

Trading screen: https://i.imgur.com/gF4K05B.jpg
Homepage: https://i.imgur.com/fNt6WX8.jpg
Newscloud: https://i.imgur.com/b4nb3Sx.jpg

You can learn more about me personally by visiting my LinkedIn profile at http://www.linkedin.com/in/jaronlukasiewicz, and feel free to reach out to me directly at jaron@coinsetter.com. I look forward to talking with everyone!

Jaron Lukasiewicz

Are you going to have an API, so people can run trading bots?

Yes, offering an outstanding API is very important to us, and our goal is to have the best one out there. Our REST API has resource-oriented URLs with human-readable error messages and default JSON responses. Everything you can do from the control panel, you can also do through our OAuth authenticated API. We have detailed documentation and will be providing libraries in many popular languages.

Very excited about this.

Mods - if you're watching, you can whitelist the OP.

Is this based on the bitcoinica source code?

No it is not, and we definitely want the community to know that.

You two know each other?


It would be just about high time, finally.

Seems cool.

But how could one seriously trust you with their money? What stops you from running away with it?
You should deposit the amount you have on the platform to several trusted escrows.

Hey MPOE-PR, Erik and I have spoken a couple of times recently (we have random friends of friends of friends in common) but do not know each other on a personal level yet. As Coinsetter works on becoming an important company in the bitcoinosphere, I'm sure we will continue to get to know each other better.

Cedivad, that's obviously a huge (and justified) concern with any bitcoin company. In the long run, the only way we can actually build trust is slowly, over time. That goes for pretty much any business in any industry. The first thing we're doing is making it very public about who we are so that we can be held to a high level of accountability. If you look at Yo's (my business partner: http://www.linkedin.com/in/jchysk) and my track records, you'll see a history top notch positions at respected companies, as opposed to a history of producing "get rich quick" schemes. Additionally, while Yo and I are funding the company personally at this time, we are working on raising seed capital for Coinsetter from respected tech investors. We are creating a company in the right way.

There are other ways we are working to earn trust and create a great platform. We are looking into taking out insurance against hacks to help protect our customers' account balances (this is only a secondary protection, our primary focus is on constantly securing our system against hacks). We are also based in the US and bound by US law.

I appreciate your escrow idea, but it's not a path I believe we'll follow at this time. First, I have to place just as much trust in them as I place in myself, and it's not a dependency I'd be willing to have our company rely on. Second, it doesn't really seem feasible from a technical level. Funds deposited into an account are used to make trades. We expect trading accounts on Coinsetter to be quite active, so the having money sitting in escrow would slow down trades with no added benefit. Third, it would increase trading fees. Fourth, this seems like a theme that's prevalent when talking about bitcoin companies, but we wouldn't expect Forex.com to hold money in escrow because we don't trust them. We look at our company as being professional on that level. Finally, similar to the first point, bitcoin escrow companies are companies that have earned users' trust over time, but they are no more trustworthy than we are. I would rather build up my own reputation in the community and gain users slowly as I prove myself than to rely on an escrow company just because everyone told me they're okay.

Hopefully my reasoning behind this makes sense. With that said, I want to do everything we can to demonstrate that we are a company you can trust. I'm open to all ideas on how we can make you feel comfortable using our platform, and we'll work hard to show the community that we are a legitimate company doing things the right way.

Frankly, there is a need of this sort of thing. Currently the situation is that some inept kids tried it and it blew up in their faces, hurting a bunch of more or less innocent bystanders. After that some even more inept kids stole the codebase and are practically speaking a crater waiting to happen. So, if you actually know what you're doing, have the human and financial capital to do it and will stick to it that's great. Impossible to call it at the present time, but it'd be a good idea to get in the WoT, and perhaps see here (https://bitcointalk.org/index.php?topic=124441.0).

Thanks for pointing me to the WOT. We've definitely studied up on the history of people that have created similar platforms to what we're building. I'm 100% committed to creating the company that does this right (and I'll keep openly putting my money and reputation on the line to prove it). If you have any specific things you'd like to see us do/offer based on your experience with some of the previous platforms that have emerged, I'd love to hear it.

Would you be prepared to disclose the precise logic of how your trading platform executes trades, in other words would you be prepared to share pseudocode for the exchange mechanism?

Hey Hazek, the source itself will remain closed. However, we don't mind releasing some of the pseudo-logic of the order process after we've made sure we have filed all the IP protection rights we're within legal rights to own and have passed all security audits (which we will complete both internally and through a third party after our seed capital raise) to ensure we're not opening ourselves to exploits. We will do a detailed write-up of many of the implemented and to-be implemented security measures we take to protect our users.

That's good to hear because the main reason I'm asking is it's the only way we can really know whether or not your platform is a bucket shop like Bitcoinca was or not. I don't know if you're familiar with the expression "getting Zhou Tonged" but it's certainly not something I'd like to see being used with regards to your platform :)

Yeah I totally understand. The leverage we offer on our platform will be provided internally, first through our own personal capital, and second through a line of credit we will have with our lenders. I think this is important because it aligns our incentives with customers in many ways, especially in regards to how we would be impacted by security breaches (we would personally lose more money than our customers would). That's one way I hope to build confidence in our platform: by putting our own money where our mouth is.

At launch, we expect our lending base to be relatively small (somewhere in the $20,000 to $50,000 range). As we grow, it will be a central focus of our company to continuously expand the amount of capital we can offer as leverage to users. One important aspect of our platform I would like to make everyone aware of is that trades on our site are limited to a holding period of one week. We intend to extend this holding period as we go on, but with limited capital at hand, we want the loans we offer to be used by active traders as opposed to being stored up by long term investors. Not that I have anything against the buy and hold strategy, but our platform is targeted toward active traders and everyone will benefit if we serve them well. On the positive side, we will not charge interest on trades held less than 24 hours.

I like this! That is a good feature for a daytrader.
Would available leverage ever come from depositor funds? I know you said you will have lenders, also that you aren't going to be like Bitcoinica, but during the Bitcoinica times, if you deposited into your own account, there were times when you would not have access to your own funds to trade. Your funds would be snatched up (borrowed) nearly immediately by other traders.

Please allow people to trade with fractions of a bitcoin! I trade for fun and would love to start with tiny amounts on your exchange! 4-8 decimal points would be awesome!

If you let people grow from even the tiniest amounts, you build loyal customers and a more liquid exchange!

Definitely interested in trying the site out when it goes live. Go figure, I'm busting my back to get INTO investment banking right you're leaving it. Cheers, hope launch goes well. I can't stand the interfaces on these other exchanges.

RyNinDaCleM, we plan on offering the option to have your account balances earn interest by being lent out to other users. Sort of like how your bank has a checking and savings account, you would have a trading and savings account on Coinsetter. It will be structured in a way where there is never a situation where someone can't immediately access their funds, even in unlikely events such as a market crash. With that said, my complete focus is solely on using our own capital and bank loans for Coinsetter's leverage until we have that system built out.

The Fool, we will definitely allow fractional quantities to be traded. Whether or not we will have a minimum trade size is still being decided, so I'll have to get back to you on that.

MJGrae, good luck on your investment banking path. Where are you located?

Will you be offering anything beyond BTC/XXX pairs?

Hey gweedo, we're unfortunately not going to be the trading platform for people who want to trade anonymously. While it's our goal to keep user information as confidential as possible, we will comply with all United States AML practices and uphold KYC standards. Users will need to provide a lot of information (similar to opening a forex or brokerage account), and we'll have to restrict users from certain countries. These provisions will allow us to operate legally in the US, and more importantly to our users, maintain strong relationships with our banks.

ColdHardMetal, eventually we would like to offer additional currency pairs, commodities and options that are highly demanded by our users. For the time being, though, we're just focused on getting BTCUSD right and then quickly adding a few other popular BTC-related currency pairs. Our goal at our launch is to do a small number of things extremely well.

Thanks Jaron, I'm actually in Chicago. Where were you working out of?

I just want to chime in to say good luck, and that I'm very happy that a proper trading platform for Bitcoin seems to be coming soon. I'm not really interested in trading myself, but I think a market that allows leveraged trading (both short and long) will have a positive impact on bitcoin price stability, so I fully support this. Good luck guys!

I was based out of Houston. Chicago's a great city, love Giordano's.

Runeks, thanks for your support.

Looks great.

Good to see that !

Couple questions :
 - what are the implications in terms of US regulation of having a leveraged trading platform that trades an asset that's hardly legally defined ?
 - Will you guys need a blessing from the securities exchange commission ?

Hey Davout, these are important questions. We're still in the process of figuring that out ourselves. The first question I don't think we be answered for a few years. On the second question, I believe there are other regulatory bodies besides the SEC that we'd more likely be tied to. When you look at traditional forex brokers, they are governed by the NFA and the CFTC. However, that doesn't necessarily mean they are applicable to us. We're currently discussing this issue with our legal advisors.

You'd act more like an exchange than a broker if I understand correctly.

Also if you want to offer leveraged trading that means that you'll have to issue credit lines, right? Which in turn means, from my understanding, a massive regulatory framework ? Thinking about it it would fall into the broker category. So I guess you'd be a broker AND an exchange. Even though I'm not familiar with the US financial regulatory framework it does sound like a lot to handle.

Well then, good luck!

Are you going to be able to offer customers an account that can accept ACH deposits?

Yes, we will be offering ACH transfers, and my goal is to make that extremely user-friendly. Note, though, that we will only accept bitcoin transfers while we're in beta (and will be implementing development of transfer methods in the meantime).

On that line of thought, what cash transfer methods would people like to see us offer?

Just to be clear, I don't mean the ACH transfers that Coinbase offers, where they initiate a withdrawal from the user's bank account. By "ACH deposits" I mean the ability for a user to initiate the transfer from their end, from their bank to your service, or conceivably via direct deposit.

Ok thanks. Is the thought that you would rather not link an account on our site, and could just initiate a transfer from your own bank account?

I don't think you'll get a big enough sample of request with regards to options on this forum so if you ask me it's best to just figure this out for yourself, a find a couple of good options for fiat deposits and stick with your decision ;)

More like I'd rather have my paychecks skip my bank account entirely and get deposited directly into a trading account.

I know it's possible with combination brokerage/banks like Etrade.

I'm interested in the highlighted part above. Why is this the case? The biggest hurdle for me when trading via US brokers is the huge free it costs to transfer funds to my account. I've thought about suggesting bitcoin transfers to them since this is virtually cost-less. Why won't you be taking advantage of this?

Hey runeks, I'm not quite sure I follow your question – could you clarify it a bit for me? It seemed that you were suggesting we offer cost-free bitcoin transfers to fund an account, which we will be doing.

I think runeks misunderstood your statement "that we will only accept bitcoin transfers while we're in beta" to mean that bitcoin transfers would only be available in beta, and would be unavailable once the site is out of beta and traditional transfer methods are added.

What I see for CoinSetter is that a clone of Bitcoinica, plain CFD trading for BTCUSD. Are there any more catch for your service? How would the security of your service be any better than Bitcoinica or MTGOX? If yes, please prove it.

Next, we see that you are a just a Jr. Member of Bitcoin Forum. Can anything of you (identity information?) be shown to everyone to prove the trustworthyness of you? And do you have anyway to show that you have the capital for users do to leverage trading, for the transparency sake of the business.

You also mentioned that your company is US based. How and in what way you could prevent things like GLBSE's shut down happening to you again, by the accuse of money laundering etc.

And one more suspicious point, how do you managed to have like 500 Likes on Facebook, when you got only a few replies on here, with business to be opened yet. You bought them? Or were you just trying to fake your popularity and gain some trust with them?

By the way, in what perspective you are more advance than  1Broker.com (https://bitcointalk.org/index.php?topic=123492.0;all), you don't have commodities trading, no stocks etc.. In what perspective Bitcoiners should go for you instead of 1Broker?

Hey 001sonkit, I can see you are understandably leery of a group starting a bitcoin trading platform. We definitely want to work with our users and the community to demonstrate that we are capable of handling the big responsibility of operating the levered trading platform we are building, which will become an important part of the bitcoin ecosystem. However, I feel that the attitude in your post is more along the lines of "accuse first, never admit a job well done," which I don't feel is very productive. Instead, maybe you could give me realistic ways to help demonstrate that we are the right company for this task. Also, many of the subjects you've brought up I have already answered in some of my other responses, but I'm going to go ahead and reanswer them here.

First of all, as I mentioned early on, we have used absolutely no source code from Bitcoinica. Zero. This is an especially personal point for me, given the tens of thousands of dollars I am spending personally right now to build our platform from scratch, building it the right way with a big focus on quality and security, instead of taking the easy path of just building off of Bitcoinica's source code. The hackers that know their source code inside and out will quickly tell you that ours is unrelated once we launch.

Second, you ask if there is any more catch for our service. However, we have received a large and growing number of emails from active traders who are excited to move their trades over to our platform if we deliver on what we are promising. It appears that you don't see the value in a margin trading platform that offers the ability to lever your trades, short the market, use a stellar API and trade on a user-friendly interface.

On the note of security, we will have an independent security audit conducted on our platform to review our code and validate its security after our seed capital raise. Until then, we are working hard to simply build a very secure platform that we personally have confidence in. As I mentioned before, I will personally be providing the first portion of capital used for leverage from my own savings that I earned through working in investment banking and private equity, so I would personally lose a substantial amount of money if we are hacked. Also, as long as premiums stay in the affordable range we have been quoted, we plan on taking out insurance in the case of hacks. So we will be paying thousands of dollars a year on that as well, and not passing the cost along to our customers.

The whole identity topic shows that you probably didn't read my first post in this thread at all. I provided my background, as well as a link to my LinkedIn profile. You'll notice that I have a history of strong roles with reputable financial companies. While this isn't everything, it should at least hint that I work hard and am a credible person.

I could speculate on what will happen to the regulatory environment regarding bitcoin but will not. We're working hard to run our company the right way and prevent money laundering on our platform and exchange.

Let's stop using the word "catch". Coinsetter doesn't have a catch. We're building the best platform we can, and we believe it's a great one. We are also taking multiple steps to give people comfort in using our platform and provide them protections that no other company has even thought of (has any other company even mentioned spending money on insurance and security audits?) It doesn't have to happen immediately, but over time I believe we are the platform people will trust and prefer to use over any other.

As dust has clarified, I took your statement to mean that you will only be offering bitcoin transfers while you're in beta (and will stop accepting bitcoin transfers when you go out of beta). But I get it now. I think placing the "only" before "bitcoin" instead of "accept" would clarify, eg.

"Note, though, that we will accept only bitcoin transfers while we're in beta [...]"

But it might just have been me who misunderstood that :).

No worries, I'm just glad we're on the same page and will be offering what you wanted. I'd hate to be a bitcoin company that didn't accept bitcoin transfers!

lol that would be weird :D

Btw nice professional response in your post before last.

Thought I'd provide a little bit more information:


Stack:
The production stack will have HAProxies that manage the database, and instances underneath. It's Nginx, Uwsgi, Python.
Beta is currently on AWS but we plan on migrating to the SuperNAP, a Tier-4 elite datacenter and easily the best in the world.

Security:
We are taking security very seriously considering how poor practices or weaknesses have been the downfall for many before us. I don't wish to go into full specifics right now, but will publish a much more detailed guide to what measures we're taking to ensure everyone's security after everything has been audited by a reputable security firm and we can use their name as a stamp of approval.
I will tell you that we'll be having regular penetration tests, anything that we don't need to know is SCrypt hashed, all sensitive data is encrypted with 2048-bit RSA public/private keys or AES256, and access to keys extremely regulated. After reviewing the threat models we also designed the system in such a way that a compromised system won't provide keys to the entire kingdom. The application server will very regularly (multiple times an hour) have audits to ensure the integrity of the files. If anything has been altered it will automatically be pulled from live. Also, the production servers won't have compilers on them.
This is all really scratching the surface of everything we're taking into consideration and doing.

My connection to Coinsetter and a little about me:
My name is Yo Sub Kwon.
I serve as an advisor to the company and I made the original tech stack decisions and built out majority of the initial design patterns. I designed the first iteration of the database, API, security, and scaling.
I've designed deployment systems to update, balance, and scale websites handling millions of users in my past and I'm familiar with building high performance web applications.
I currently work for a cyber-security startup called LaunchKey where our primary focus is private, secure authentication.

My connection to Bitcoins:
I was the one originally hosting and sponsoring britcoin.co.uk with Amir Taaki which later turned into Intersango.
I donated over $2000 to the libbitcoin project to move forward its development from my personal finances.
I was a sponsor of Bitcoin Conference London 2012 (Shirtsbyme)
Although I have very few posts, I've also been a member of this forum since Dec 2010.

Say no more. How did you and IdiotParade, Inc. part ways? Or moreover, did you part ways?

Amir (I assume you're referring to as IdiotParade) and I haven't spoken since April of last year. I don't know very many of the details on what went down, but it seems he made some grave mistakes regarding the Bitcoinica fiasco. From my interactions with him he seems like a very hard-working and idealistic individual.

The Britcoin project I only hosted the alpha for about 2.5 months from March 2011 to the beginning of June 2011. I had consulted many major law firms in the US at the time on the legalities of handling the project. Amir had wanted to make a trustworthy and security-focused exchange, so he wanted financial backing with a reputable company supporting the project.

One law firm stated they would give their legal backing but would require a $10MM retainer. Another firm needed $50,000 just to come to a decision whether or not they would be able to give their legal backing. The reason we wanted a major law firm's legal backing was in case anything were to happen with the (at the time) extremely uncertain currency involving the company's legalities we would feel better protected. Unfortunately, the legal costs were far more than we were willing to allocate towards what was a personal pet project of mine. As such I had to withdraw my support and Amir continued on.

Taaki, McCarthy, Strateman, a dozen or so names could be tacked on. When I say parade I mean parade, but let's just say a lot of unseemly activity occurred not by any means limited to Bitcoinica and leave it at that.

Sounds a lot like Interactive Brokers. As someone who is a longterm bitcoin investor only, what other reason would I have, if any, for using your site?

Hey dirksizzlebod, just so I'm clear, the purpose of our platform is to trade bitcoin (BTCUSD followed by other bitcoin-related currency pairs), not traditional forex currencies as you would on Interactive Brokers. You're right in noting that our platform is primarily targeted towards active traders. However, as a long term investor, the benefits to using Coinsetter over another exchange are a better (more enjoyable-to-use) interface and higher security standards. Exchange pricing should be about the same, and you'll have access to more orderbooks with us (i.e. access to the best market prices). We also plan on insuring our exchange against hacks, which is a protection no other exchange offers.

(11) I will soon bring it on a full report about my relationship with exxe and 1BTCroker. Stay tuned.   :-X (11)

Oh hey something is happening!  Private beta!

BitCoin needs a simple exchange more than it needs a levered forex trading platform. It's amateur-land at the moment and one well built exchange will quickly replace all the current offerings. If this isn't your focus just ignore me but I see no reason why your trading platform can't also act as a regular exchange.

If you could build the following things into your platform many people would be very grateful:

1) A clean and functional way to transfer fiat into BitCoins and BitCoins into fiat.
2) A clean and functional way to deposit and withdraw BitCoins and fiat using normal bank transfers.
3) A trade engine that keeps on running under heavy load.
4) A site that keeps going under DDOS, application level attacks, or hardware failure.
5) Good security including options like 2-factor authentication and sms or email confirmations, and locked-in withdrawal addresses.
6) Legal compliance in everything you do so that you don't get shut down as 'terrorists' like bitcoin-24.
7) Agreement from all the banks you deal with on what you are doing so they don't freak out and freeze your accounts.
8) Insurance for all assets so that should you get robbed your customers don't.
9) Support that actually supports. Instant chat would be very nice but a ticketing system with knowledgeable people who answer helpfully within an hour would be great too.
10) Reasonable fees.

OK, I ask for a lot. If you can offer the greater part of the above you would quickly become the number 1 BitCoin exchange.

Prices of 101/106, no dates listed on the open trades section. Is this service still active?

He probably mean at 2014's Feb/March

They are in a friends and family closed beta testing phase atm.

Just signed up .. got my fingers crossed. I barely escaped the bitfloor fiasco..

Hopefully these guys pan out.

Good luck Coinsetter!

Just signed up with coinsetter from the US.  I entered all my personal details, passport, electric bill and got this:
Could you put that sooner in the process??
https://i.imgur.com/SSLrOL1.png

Anyone using the beta a US user? Coinsetter is looking good but i have a US users question ..
Lets say the price of bitcoin is $720 like it is now and I deposit a single bitcoin into my coinsetter account.


If i then sell the bitcoin for $800, am i left with $800 in dollars on the exchange which i then have to purchase bitcoins to withdraw it?


OR


Or does my single bitcoin turn into 1.111 btc immediately?
( the .111 representing the $80 bucks or so that was profited in the sale )



 Zedicus

I have a question about the BTC derivative that is traded on Coinsetter. Are all trades still backed up by real BTC and real fiat? And, are the order books from BTC denominated and USD denominated accounts the same?

Other than that, it would be great with updates as to how things are developing and when you plan on exiting 'beta' and launch public access?

Just signed up with coinsetter

Looks like the instrument & platform we have been waiting for

I did not see the btc\$ account type selection stuff ... as I think this was an old idea etc (I hope)

Having said that how do i get BTC onto the exchange ??

Anyone still looking for a beta invite, I'm running a contest:

http://theblogchain.com/misc/coinsetter-beta-code/

Three people will also win .1 BTC