On 2nd April 2017, Ethbits announced the upcoming launch of their ICO crowd sale for a digital currency exchange that leverages blockchain tech. The startup will at first only facilitate over-the-counter transactions, but plans to expand operations into a full-fledged, blockchain-based digital currency exchange. The ICO will help fund its development.
Ethbits to Raise Funds for Blockchain-based Exchange
The ICO will begin April 15 and continue to May 13, with the first phase of development commencing immediately afterwards. According to a press release, soon after the ICO the company will launch the beta version of their over-the-counter exchange, dubbed Ethbits Local.
Ethbits Local is the existing platform, founded in the middle of 2016 by Monty Singh. It has a very similar model and style to that of LocalBitcoins. Just like LocalBitcoins, EthBits Local allows buyers and sellers to connect with one another and interact on a face-to-face basis.
Using the platform itself is fairly straightforward. Just as with LocalBitcoins, users request or offer the cryptocurrency for a fixed amount, and settle trades in person for cash, or online with bank transfers. Ethbits Local hopes to mimic that platform’s success, which would be a noteworthy achievement considering that, by August 2016, LocalBitcoins had 1.35 million people using its exchange from 249 different countries.
However one differentiating factor, according to Ethbits.com’s director and founder Pravjit Singh, is that their platform will allow traders to buy and sell altcoins as well as bitcoin.
“LocalBitcoins allows users to buy bitcoin without a bank account, but we are moving into alternative currencies to cater for the growing movement into crypto.”
Building the “Next Generation Digital Currency Exchange”
Ethbits Local will launch immediately after a Token Crowd Sale. Customers will use the platform’s token to pay site fees, and a planned integration with payment cards like Mycelium will allow users to spend the tokens around the world. The funds will help Ethbits.com enter the second phase of development, a trading exchange called iTrade.
Ethbits iTrade will launch in 2018, covering the top 15 cryptocurrencies. The trading platform will be built on top of the Ethereum blockchain and will revolve around a system known as “copy trading.” Copy trading means users can follow the top crypto traders, essentially subscribing to their trade habits and automatically copying each and every trade they execute.
The platform incentivizes this model by allowing the top traders to profit from their followers, earning a percentage of their earnings — making more money with each new follower. Hence, this system creates a self-reinforcing ecosystem whereby new traders benefit from skilled traders’ knowledge, and the experienced market gamers can amplify their profits based on the number of followers they have.
According to Singh, they will also supplement this with gamification, allowing traders to obtain power-ups and privileges such as reduced fees. All this aims to generate further interest in the exchange.
Bitsonline asked Ethbits how they would monitor its users through AML/KYC compliance. The company did not immediately respond.
Furthermore, the token used in the crowdfund, simply called the Ethbits Token, will enable participants to share the platform’s trading fees. It will distribute up to 80 percent of the profit to the holders of the site token which is pooled and distributed on a quarterly basis. The token ($ETB), will itself will be available to trade on iTrade platform.
Finally, Singh commented on the company’s vision, saying that is the future of digital currency trading:
“Having easy-to-use, secure cryptocurrency technology that integrates P2P exchange between fiat and cryptocurrency, credit card capability, and cold, secure storage of user funds while providing novice users techniques to improve their skills is the future of safe trading and exchange of assets. Providing users with a return on net profits serves as an additional Enticement.”
What do you think of Ethbits’ blockchain-based cryptocurrency exchange? Let’s hear your thoughts.
Images via Ethbits, Localbitcoins.com, Vice