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December 14, 2013, 02:22:25 PM |
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Exchanges that operate solely on the basis of crypto for crypto trades, say BTC/LTC, are far easier to maintain because for now governments don't regulate them nearly as much. A BTC/USD exchange on the other hand needs to register as a money service business with, in the US, FinCEN, for example, and I'm sure other countries carry similar regulations.
Also, it's really not that complex or cumbersome if you do it once. BTC-E and Cryptsy are both exchanges that require a minimal amount of personal information, at least for me in the EU. BTC-E also carries a few alt coins vs. USD pairs.
However, you are right in that it presents some difficulties if, for example, you intend to trade alt currencies. You are continually running Bitcoin-volatility-risk and cannot trade (most) alts independent from Bitcoin. This is a weakness for alts, but only as long as they stay small. Something like Litecoin is slowly getting its own services, but it remains to be seen whether it can actually get a function ancillary or as a replacement to Bitcoin.
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