ICBIT: Difference between revisions

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Restore the version which uses properly references sources, not Eldentyrell's own biased opinion.
Eldentyrell (talk | contribs)
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Restore the version which uses properly referenced sources, not Fireball's own distortion -- he's biased because he WORKS FOR ICBIT
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ICBIT is a trading website which runs a few markets. Both the Exchange (currency exchange, stocks and bonds trading) and Futures markets are live now, however the most active is the Futures market.
ICBIT is a trading website which runs a few markets. Both the Exchange and Futures markets are live now.
This site is said<sup>[source?]</sup> to be founded by Fireball and [[DeepBit]] by combining best practices in high-performance trading and Bitcoin experience.
 
'''ICBIT is not an exchange''' since it does not act as a central counterparty. [http://web.archive.org/web/20130510221928/https://icbit.se/margincall According to their website] users '''are totally exposed to counterparty risk from other traders''' whose identities are concealed from them; the exchange does not pledge its own assets to back the full extent of the other side of a customer's position -- it pledges only "as much to profiting traders as loosing traders lost (in total)".  Traders are not allowed to conduct background or reputation checks of any kind on these anonymous counterparties.  ICBIT recently modified the linked page and it '''now contains self-contradictory information,''' such as "we do pledge our own assets, it's not always the case" and "your profitable position will be closed" at whatever price the exchange deems convenient rather than value-at-maturity.  Since the exchange pledges only "as much to profiting traders as loosing traders lost (in total)" it is, by definition, not the [http://en.wikipedia.org/wiki/Counterparty counterparty] -- the "loosing [sic] traders" are the counterparty.
 
A third party's assessment<ref>http://psychologicalinvestor.com/lib/real-markets/bitcoin-derivatives-liquidity-counterparty-risk-134/</ref> of the situation is that "ICBIT it is not acting as a clearing house, nor is it the counterparty to the futures trades it brokers.  There is no clearing house guarantee, and counterparty risk remains largely unknown."


This site is said<sup>[source?]</sup> to be founded by Fireball and [[DeepBit]] by combining best practices in high-performance trading and Bitcoin experience.
This site is said<sup>[source?]</sup> to be founded by Fireball and [[DeepBit]] by combining best practices in high-performance trading and Bitcoin experience.


== Counterparty risks ==
== Counterparty risks ==
The ICBIT exchange acts as the central counterparty for trades in futures contracts. Unfortunately, however, it does not act as a final guarantor for the clearing process itself, with the results of the clearing process still ultimately dependent upon the exchange’s ability to effect margin calls where necessary; should that process fail due to counterparty risk from individual traders, the exchange does not guarantee to make up the difference. Thus, the exchange acts as counterparty only until it decides it won’t because it is unable to extract funds from traders on the wrong side of contracts which it holds. <ref>[http://psychologicalinvestor.com/lib/real-markets/bitcoin-derivatives-liquidity-counterparty-risk-134/ Bitcoin Derivatives, Liquidity and Counterparty Risk]</ref>
The ICBIT site acts as the central intermediary for trades in futures contracts. It does not act as a final guarantor for the clearing process itself, with the results of the clearing process still ultimately dependent upon the counterparty risk exposure to other traders. Thus, the exchange does not act as a counterparty.


Margin call policy is explained on the [https://icbit.se/margincall ICBIT website].
Margin call policy is explained on the [https://icbit.se/margincall ICBIT website].

Revision as of 13:06, 28 September 2013

ICBIT is a trading website which runs a few markets. Both the Exchange and Futures markets are live now.

This site is said[source?] to be founded by Fireball and DeepBit by combining best practices in high-performance trading and Bitcoin experience.

ICBIT is not an exchange since it does not act as a central counterparty. According to their website users are totally exposed to counterparty risk from other traders whose identities are concealed from them; the exchange does not pledge its own assets to back the full extent of the other side of a customer's position -- it pledges only "as much to profiting traders as loosing traders lost (in total)". Traders are not allowed to conduct background or reputation checks of any kind on these anonymous counterparties. ICBIT recently modified the linked page and it now contains self-contradictory information, such as "we do pledge our own assets, it's not always the case" and "your profitable position will be closed" at whatever price the exchange deems convenient rather than value-at-maturity. Since the exchange pledges only "as much to profiting traders as loosing traders lost (in total)" it is, by definition, not the counterparty -- the "loosing [sic] traders" are the counterparty.

A third party's assessment[1] of the situation is that "ICBIT it is not acting as a clearing house, nor is it the counterparty to the futures trades it brokers. There is no clearing house guarantee, and counterparty risk remains largely unknown."

This site is said[source?] to be founded by Fireball and DeepBit by combining best practices in high-performance trading and Bitcoin experience.

Counterparty risks

The ICBIT site acts as the central intermediary for trades in futures contracts. It does not act as a final guarantor for the clearing process itself, with the results of the clearing process still ultimately dependent upon the counterparty risk exposure to other traders. Thus, the exchange does not act as a counterparty.

Margin call policy is explained on the ICBIT website.

Features

For its currency exchange section ICBIT makes an accent on the following:

  • State-of-the-art technologies usage. Instead of using old, slow, polling-based algorithms ICBIT builds atop of the most up to date technologies. Its web trading client is in pure HTML and JavaScript (even compatible with most mobile devices), however it's fully realtime thanks to websockets and AJAX.
  • Speed of trading. Bitcoin forum is full of anger against slowness of existing exchanges. ICBIT implements special high performance trading engine and uses high-performance "no SQL" database to eliminate the problem.
  • No limits. Most of the existing exchanges put rather restrictive limitations and require users to prove their identity. ICBIT finds this totally unacceptable and does not put any limits at all.

Futures

Futures traded include:

Futures contracts on USD/BTC rate

  • BUQ3 (expires August 15, 2013, settled in BTC)
  • BUU3 (expires September 16, 2013, settled in BTC)
  • BUV3 (expires October 14, 2013, settled in BTC)
  • BUZ3 (expires December 16, 2013, settled in BTC)

Futures contract on Bitcoin difficulty

  • DFU3 (expires September 16, 2013, settled in BTC)
  • DFZ3 (expires December 16, 2013, settled in BTC)

Futures contract on LTC/BTC rate

  • LBU3 (expires September 17, 2013, settled in BTC)

Futures contract on S&P500 index

  • ESU3 (expires September 16, 2013, settled in BTC)

Settled futures:

  • BUZ2 (Futures contract, expired December 15, 2012, settled in BTC)
  • BUH3 (Futures contract, expired March 15, 2013, settled in BTC)
  • CLG3 (Crude Oil Futures contract, expired February 14, 2013, settled and quoted in BTC)
  • GDG3 (Gold Futures contract, expired February 14, 2013, settled and quoted in BTC)

Exchange

Traded on the exchange are:

  • BTC/USD
  • BTC/RUB (Russian Ruble)


Adding Funds

BTC

There is no fee for Bitcoin deposits to the account's BTC EWallet. Funds are added to the account's wallet after six (6) confirmations. Transactions made by DeepBit mining pool are added instantly.

USD

There are no methods to add USD funds.

RUB

QIWI vouchers can be used to add funds to an account's Russian ruble EWallet.


Widthraw Funds

BTC

There is no fee for Bitcoin withdrawals from the account's BTC EWallet.

USD

There are no USD withdrawal methods.

RUB

Funds can be withdrawn from the account's Russian ruble EWallet as QIWI vouchers.

Security

Accounts can be protected where both login and any money withdrawal operation requires the one-time password (OTP) feature known as two-step authentication. A mobile smartphone with Google Authenticator is the most commonly used OTP device.

History

First mentions of ICBIT appeared in June and July 2011 in the Bitcoin Stock Exchange Security Standards thread at bitcointalk.org[2] and Bitcoin futures market discussion [3]. By that time a very first version of the trading engine was developed.

A more detailed thread specific to ICBIT futures market was started [4] in November, 2011. The first closed test of futures market was performed, and work on the new version of web trading client was started.

Finally in January, 2012 the currency exchange section went live [5]

See Also

External Links


References

  1. ↑ http://psychologicalinvestor.com/lib/real-markets/bitcoin-derivatives-liquidity-counterparty-risk-134/
  2. ↑ Bitcoin Stock Exchange Security Standards thread
  3. ↑ Fireball's statement about ongoing futures exchange work
  4. ↑ ICBIT derivatives market thread
  5. ↑ Bitcointalk announcement of a new exchange live testing
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