A Conversation About Bitcoin Exchanges

Platform providers are drawing upon experience with high-frequency trading and fintech to create infrastructure for virtual currency exchanges.

Virtual currency startups are attracting a lot of media attention and interest from VCs and private equity firms. In October, AlphaPoint, a white-label financial technology platform that powers global digital currency exchanges, received $1.35 million in funding from Ben Franklin Technology Partners.

Bitcoins massive growth has created a need for infrastructure that is scalable and reliable, says AlphaPoint. The company says it's leveraging high-frequency trading expertise from the development of fintech solutions used by UBS and Deutsche bank to deliver a secure solution. The platform can process more than 1 million transactions per second and get up and running in 20 days, according to the latest release. Bitfinex is using the exchange platform in beta phase for buying and selling of Bitcoin and Litecoin.

I caught up with AlphaPoint CEO Vadim Telyatnikov and Bitfinexs Josh Rossi, VP of Business Development, to discuss the new ecosystem for crypto-currencies and how it differs from, or is similar to, traditional exchanges.

Vadim Telyatnikov, CEO of AlphaPoint

AlphaPoint CEO Vadim Telyatniov is focusing on the international growth of Bitcoin exchanges, requiring scalable and resilient exchange platforms.

WST: Who is trading on Bitfinex? It sounds as if merchants and Bitcoin payment providers are customers. Our readers include technologists, traders, and others who work at brokerage firms, hedge funds, and asset managers. Is this relevant to them?

Ross: We have a wide variety of users ranging from financial institutions to individuals. Access to liquidity is vital for a growing ecosystem, and I think the most interesting way that we really underpin the Bitcoin economy is by enabling merchants and payment processors to be able to convert easily between Bitcoin and USD. Another interesting use case is exchanges, given that many other exchanges are turning to us to tap into our very deep [order] books. However, I think that professional traders, institutional investors, and algorithmic traders love trading on Bitfinex, because, besides margin trading, we offer some of the more advanced tools that they may have previously used in traditional markets.

WST: Which other Bitcoin exchanges does AlphaPoint provide this technology to?

Telyatnikov: AlphaPoint powers over a dozen exchanges worldwide with exchangecustomers in Norway, Mexico, Africa, United States, Canada, Czech Republic, Singapore, China, Panama, Belize, and Australia. Clients include Cointrader.net, Canadas premier Bitcoin exchange and top 10 USD exchange platform; meXBT, the leading exchange in Latin America; BitcoinsNorway, the first exchange in Norway; and Bitt, the first provider of digital currency exchange and merchant processing services to the Caribbean Community [CARICOM]. We offer our technology as a white label also, so some exchanges prefer to not to be named.

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A Conversation About Bitcoin Exchanges