A Reliable Cryptoexchange: We Are Combining a Centralized Trading System with the Blockchain Protocol
In the past two years, the cryptocurrency market has undergone significant changes. If earlier cryptocurrencies and the blockchain were just the realm of geeks, then now very serious organizations are beginning to work with cryptocurrencies. These organizations see digital coins of various types and the blockchain infrastructure as work tools. They are new, but still very promising.
The cryptocurrency market is constantly growing — for the past few months, the overall capitalization has grown to $600 billion. It is true that such active expansion is, in large part, due to the exchange rate growth of bitcoin and several alt-coins (ether is an example). But one can still be sure that this market is undergoing significant changes, and more major and important players are coming to take part. As proof of this, its worth considering that just a short while ago, the trade of futures for bitcoins was opened by two of the largest exchanges: the Chicago Mercantile Exchange (CME Group Inc.) and the Chicago Board Options Exchange (CBOE).
Problems that scare away big business
Nevertheless, major players encounter unfamiliar problems when they start working with the cryptomarket. This includes the lack of market transparency and legislative regulation, a mass of technological vulnerabilities, and other issues. Brokers and institutional investors are in need of reliable work tools that are familiar to them. But either there aren’t any, or they are few and far between.
The tools that are out there are not exactly reliable. A cryptoexchange may work today but tomorrow completely disappear. A very fresh example is the South Korean cryptocurrency exchange called Youbit, which declared bankruptcy in mid-December following its second hack of that year. Its story is far from unique. Furthermore, it’s far from clear whether the exchange really was hacked or if its management just decided to finish its work in such an original manner (as happened with Mt.Gox). Even completely reliable exchanges are not always able to handle peak operation/transaction volumes. All of this elicits distrust for the industry among major players.
So what can be done?
It’s now become clear that mechanisms for legislatively regulating the sphere are necessary. Several steps in this direction are already being taken. People are trying to regulate the cryptomarket both externally (governments of various countries), as well as from within. One of these internal projects is the Qurrex hybrid cryptoexchange.
One of the ideas at the heart of the project is the introduction of existing standards for classic stock markets to the cryptomarket. These standards will work effectively for all industry participants. They concern both principles of working and participant interaction, as well as technology. This should help us to not only achieve transparency of the work of all participants, but also reliability, thanks to the introduction of new security standards. Just like in a traditional financial sphere, cryptotools should be:
● Reliable;
● Secure;
● Fast.
Technical details
In the first case, we must ensure that the cryptoexchange can handle any load. Transactions are now being carried out more, and not all exchanges can withstand such a workload.
In the case of Qurrex, the issue is resolved with the use of high-performance solutions of classic exchanges, as the CEX infrastructure meets all the demands of participants of a traditional financial market, including performance, reliability, and modernity.
Institutional clients and brokers will work with professional tools used in a traditional financial market. Such tools provide, in particular, the ability to perform technical analysis and conduct transactions at a high frequency. The DEX, meanwhile, eliminates the need to deal with middlemen, improves the reliability of the entire system thanks to the blockchain, and provides access to the aggregate liquidity from all network nodes for all participants.
System parameters:
● 70,000 transactions per second (for the Visa infrastructure, the scope is 60,000–70,000 operations per second and 2,000 per second for normal bandwidth);
● Delays — 650 microseconds (99% of transactions are carried out with exactly such a delay, no more);
● Availability of secure, “cold” storage for user data;
● “Hot” (i.e. online) wallets with connected insurance;
● Availability of a high-performance API, native, FIX/FAST, WebSocket, and REST.
According to the plan, one of the companies well known in the IT-specialist field will work on the security system of the Qurrex hybrid cryptoexchange (negotiations with several potential partners interested in the project are currently underway). To ensure the transparency of business infrastructure, we will use an annual business audit, as well as provide access to information on the condition of accounts.
Why this will work
The fact of the matter is that the project didn’t just appear in an empty space. It wasn’t a random idea for a startup, but was a real need for the cryptocurrency market. Qurrex is being developed thanks to the efforts of a team of more than 30 people. The majority of many years have been spent in the sphere of developing tools and solutions for financial organizations, in the brokerage sphere, and in cryptotrading. The development of Qurrex didn’t begin now, but in November 2016. The synthesis of the idea of the blockchain and a traditional finances market allow us to form a qualitatively new system that will be profitable for everyone, including brokers, institutional clients, representatives from the world of cryptofinances, and average users.
