Importance of Cryptocurrency Exchange: The IC ExchangeJuly 26, 2018
If you are going to get into buying any cryptocurrencies besides Bitcoin, you will most likely have to start to venture into the exchanges.Exchanges are where you can trade coins for other coins or traditional currencies like Dollars and Euros.They function somewhat like the New York Stock Exchange. A bitcoin exchange market is a digital marketplace where traders can buy and sell bitcoins using various fiat currencies or altcoins. A bitcoin currency exchange is an online platform that acts as an intermediary between buyers and sellers of the cryptocurrency. Cryptocurrency exchange is a businesses that allow customers to trade cryptocurrencies or digital currencies for other assets, such as conventional fiat money, or different digital currencies. They can be market makers that typically take the bid/ask spreads as transaction commissions for their services or simply charge fees as a matching platform.
A number of digital currency exchanges perform outside of Western countries, avoiding regulatory oversight and prosecution, but exchanges often manage Western fiat currencies, sometimes maintaining bank accounts in many countries to facilitate deposits in various national currencies.They can receive credit card payments, wire transfers or other forms of payment in exchange for digital currencies or cryptocurrencies. As of 2018 regulation of cryptocurrency and digital exchanges in many developed jurisdictions remains unclear, many regulators are still considering how to deal with these types of businesses and regulation regimes that do exist have often not been tested for validity.
Some exchanges only transact in cryptocurrencies, and these exchanges generally have lower registration requirements than exchanges that also handle fiat currencies. In the past, it was possible to open an account at a crypto-only exchange while providing no more personal information than an email address. Those days are largely over, as regulation looms on the horizon.
Exchanges that do not innovate often allows you to register using just an email and password, without know-your-customer (KYC) or other anti-money laundering measures. In terms of structural robustness, it is easy to find out how well an exchange performs during a market crash/pump. One key attribute that separates a good exchange from a bad one, is that a responsible exchange will notify its users about scheduled downtime, server maintenance, etc. Over crowded server traffic is almost inevitable in any exchange during a market crash, but a responsible exchange will not hesitate to come out and tell their users (via email, tweet, or exchange) that they are facing certain issues and are working towards solving it. Exchanges that do transact in fiat currencies as well as cryptos, generally have greater documentation requirements. Because they also transact in Dollars and Euros, for example, they must also follow the local laws as a traditional money-exchanging business. So, it might take a little longer and be a little more involved setting up an account than with some crypto-only exchanges.
The game is changing. What we will see more, however, is more partnerships and mutual growth of cross-country exchanges. This was previously impossible due to the significant differences in the financial regulatory barriers. What we will see is cryptocurrency exchanges having real brick and mortar operations in different locations, which I believe will most definitely give users a boost of confidence, knowing that they could get local support from at least a few countries, if needed.
The IC Exchange
The IC Exchange will work as a hybrid peer to peer exchange that will provide its users with a friendly graphical user interface (GUI) offering wide variety of tradable financial instruments offered by the complete IC Ecosystem. The Exchange links the following components of the Ecosystem:
Front End: There is two main item, first one is IC Wallet safeguarding the clients` digital assets, showing balances for crypto, fiat and traditional financial instruments. Second one is IC ICO Accelerator that is listing successful ICOs on the exchange at a discount.
Back End: IC Brokerage: performing the actual exchange between crypto/ fiat against traditional financial instruments.
IC Digital Bank: safeguarding clients fiat money (custodial account)
All participants will have actual accessible accounts in the Exchange, Brokerage, and Digital Bank in addition to their Wallet by completing a single KYC form.
Order Matching System : Members will trade using an online interface, either through a desktop application software provided by the IC Exchange or a web-based application. The IC Exchange will approve several software solutions from other platform providers and exchanges that can be used for trading. The trade at any online electronic exchange platform happens when the best buy order (order with highest bid price) is matched with the best sell order (order with lowest ask price) on price-time priority basis. However, before the order goes into the trading system of the exchange, it must comply with prerequisites of a valid order. Only valid orders are available for trade. The validity of an order is determined based on a set of trading parameters. The first is the order size; it should comply with a specified lot size or multiples of it. The second is the order matching by IC Exchange order book where buyer and seller are matched. The third is the verification of the member’s bank account. The fourth is the verification of the member’s brokerage account.
Also, the order will be permitted if the user of the terminal has permissible limits of trade as well as the permission to trade given by the respective member. The trading system gives tremendous flexibility to the trader to place orders as it is equipped to accept different types of orders. These can be as the following:
-Limit order: Enables the person giving the order to specify the price at which the trade is executed. Normally the limit order is below the market sell price in case of buy orders and above market buy quote in case of sell orders.
-Market Order: A type of order that gets traded at the prevailing price on or after submission. The best counter quote is treated as the order price. However, if there is no counter-quote available, then the last traded price is taken as the order price.
These types of orders are based on the flexibility of prices for the users. However, a user may also want flexibility in terms of time. This is defining the validity of an order from a time perspective. IC Exchange provides this type of flexibility. These can be used in the form of the following order types:
-Orders valid for a trading day: These are the orders that have a life for a trading day. The orders are active during the trading day unless they are cancelled by the user or executed by the system. At the end of the day, if the order has not been executed, then the order will be automatically cancelled by the IC Exchange system.
-Orders valid till a specific date: This type of order give the trader flexibility to choose a specific date up to which the order shall have its life. It implies that if as long as the order is not cancelled or gets manually executed by the user or automatically executed by the exchange system, the order will stay active in the system till the specified date.
-Orders valid till cancelled: The trader can give a permanent life to the order by using this privilege. This type of order stays alive in the system till they are cancelled. If they are not cancelled or they don’t get executed, they will always be active.
-Immediate or Cancel: It is also called as fill or kill order. This type of order does not remain pending. It is either executed or gets cancelled.
Liquidity/Full Order Book : IC Exchange will have a full order book directly connected with major crypto exchanges and global markets. The full order book provides the necessary liquidity to instantly buy and sell crypto pairs with the tightest spreads, which ensures significant volume of transactions from day one. Liquidity will be ensured by linking exchange books under the IC Exchange umbrella. Meanwhile, the IC Brokerage’s order book will be linked to the actual traditional exchanges such as CME, NASDAQ and others in order to insure execution at the most efficient price without any additional cost by intermediaries.
IC Exchange utilizes liquidity pools to reduce time, cost, and deficiencies. Today, investors would have to go through a long and costly process to trade; If the Investor has shares and wishes to buy a cryptocurrency, the investor must first sell his shares with his broker and liquidate the value of the shares in fiat then wait for settlement to wire transfer the money. After receiving the fiat value of the shares in his bank account, the investor must buy the desired cryptocurrency from his preferred exchange after registering and going through a lengthy verification time, that is of course is if the buyer’s bank allows transferring funds to crypto websites or platforms.
Furthermore, most platforms have a daily limit and high fees to buy crypto assets. The whole latter process will have different time and cost constraints as well as different pricing and availability for different investors. The reason behind the constraints and the restrictions is the fact that in almost all scenarios, the Brokerage, Bank and Exchange charge fees and that they are separate entities with intermediaries between them charging even more fees and lengthening the process. The same transaction could be done under the IC Ecosystem without having to go through that process.
Order Routing: In order to provide the highest liquidity standards, the order execution process might be extended to two or three levels to ensure that the trade will be executed in an efficient and timely manner. Whereas a client’s request to buy AAPL against Bitcoin (APPL/BTC) could be executed at two levels, the first selling Bitcoin against fiat (BTC/USD) and the second will be buying Apple against USD (AAPL/USD). This whole process will be done automatically without any human intervention. The trading of cryptocurrencies in the IC exchange will consist of a three-level process: Step 1: Order Placing: The IC users will place their market or limit orders on the IC Exchange Platform based on the current best prices shown on the IC Exchange. Step 2: Order Matching: The IC Exchange order book connects the buyers and the sellers when the best buy order (order with highest bid price) is matched with the best sell order (order with lowest offer price) on price-time priority basis. Step 3: Order Delivery: The order delivery adapts to the type of order; direct trading orders involving only cryptocurrencies will transfer value from the seller’s IC Wallet to the buyer’s IC Wallet without interference by third parties, whereas the active components delivering the order are the users’ IC Wallets, while the IC Exchange is using the order matching system to connect the buyer and seller users together. The Ecosystem utilizes all the different components to provide the participants with seamless delivery in crypto, fiat, and traditional instruments.
Coin Listing Platform: INGOT will use the Distributed Ledger Platform Asset Issuance Module which will provide its Ecosystem participants with an environment to list their newly issued coins and pair them against fiat and other available cryptocurrencies.