Bitfinex provides some services to professional customers by supporting algorithmic trading and over-the-counter trading. Bitfinex said that the new service suite will help encourage institutions to participate in the cryptocurrency market.
In an interview, Phil Mochan, the founder and head of strategy and corporate development of Koine, explained how his security model for cryptocurrency asset custody works.
Its solution does not follow the established procedures of “hot storage” or “cold storage”, but uses three separate technologies called “digital airlocks” because their functions are similar to physical airlocks:
Mochan pointed out that external airlocks are still as vulnerable as traditional hot wallets. He emphasized that the difference is that “the median balance held there is zero, and when the balance is non-zero, it is insured.”
In addition, the entire process is clearly carried out in the “sub-millisecond time frame”, mainly relying on hardware rather than software.
Blockchain as a “single source of truth” eliminates the need for post-transaction mediation
In addition to this secure hosting method, Koine’s technical design is almost completely automated and does not rely on human intervention. It is said that it can process more than 200,000 transactions per second.
Koine’s post-transaction service aims to remove blockchain assets from the transaction cycle through a dematerialization process, thereby eliminating the need for manual processes.
He pointed out that traditional markets—such as the stock and bond markets—also tend to dematerialize assets, but they still use a multi-level trading model and require intensive reconciliation.
Finally, Koine ’s services always ensure the legal ownership of all cryptocurrency assets and (digital) fiat currencies by keeping all assets involved in the transaction under an isolated ownership model.
A Bitfinex representative revealed in an interview that Koine and Bitfinex are also undergoing some integration, “so that groups of customers who are both Koine and Bitfinex can use the tokens held in Koine to obtain credit lines on Bitfinex.”
New products and old contradictions
According to reports, Bitfinex’s derivatives platform recently launched a new permanent swap product that allows traders to speculate on the Bitcoin market share.
The exchange also launched its own social network “Bitfinex Pulse” last month to encourage exchanges between traders.
At the same time that these new products and services are emerging, Bitfinex’s parent company iFinex received a class action lawsuit in early 2020 for alleged market manipulation.