Bitfinex, one of the largest cryptocurrency exchange announces Ethfinex – a community & information hub to facilitate Ethereum-based discussion, analysis & trading platform. This announcement coming up on the very next day of Bitcoin Fork is significant for cryptocurrency space.
According to the official blog, Ethfinex is rooted in the events of the past year’s security breach on the Bifinex exchange which took 8 months to make 100% reimbursement. Today, after a long road to recovery, Bitfinex announces ‘Ethfinex’.
It’s ironic, most of the cryptocurrency exchange (an exchange for trading of decentralized assets) are actually centralized. It is more like centralized exchanges are necessity; a gateway into an inaccessible, mysterious ecosystem, with a familiar bridge between fiat and digital assets. They are user-friendly, provide speed and convenience of liquidity in a manner that users have come to demand. But, in order to recognize the true potential of blockchain technology, we mustn't exclude areas which needed to be decentralized the most like exchange, considering its vulnerabilities to centralization.
Aa mentioned in the post, “Built by the Ethereum community, for the Ethereum community, Ethfinex will be the world’s most liquid, customer-centric digital asset exchange & information platform.”
Ethfinex will be a hybrid community and information hub for developers, traders and enthusiasts alike, designed to facilitate discussion, development and trading in the Ethereum ecosystem. Ethfinex offers a new community and information hub for tokens, designed to facilitate learning, discussion, and analysis whilst simultaneously offering access to the most highly liquid and advanced trading platform for Ethereum ERC20 tokens.
Ethfinex carries the long-term vision to move towards a completely trustless exchange, with gradual decentralization of ownership to its community of users. Ethfinex will encourage the emergence of scalable and trustless solutions by acting as an experimentation zone for emerging decentralised exchange protocols, providing feedback and allowing them to test and learn.
Bitfinex is the world’s largest, most advanced digital asset & cryptocurrency exchange. It was founded in 2012 and since then it has been the go-to exchange for BTCUSD trading, capturing over 20% of total trading volume whilst providing liquidity in a diverse set of markets.
One year ago, on Aug 02, 2016, Bitfinex was hacked. Bitfinex became the latest victims of a crypto-exchange security breach. 119,756 Bitcoins were stolen from customer accounts, totalling 72m USD at the time, representing the largest theft of Bitcoins after the notorious Mt Gox incident. The breach contributed widespread uncertainty and frustration throughout the Bitcoin ecosystem and raised serious doubts as to the safety of centralized exchanges.
The volume of stolen Bitcoins amounted to nearly 0.75% of total circulation – significantly more than in active use on the Bitfinex platform at the time. Due to Bitfinex’s relative popularity, a huge subset of the Bitcoin trading community was affected and BTC prices suffered an immediate 20% drop.
On April 3, 2017, 8 months after the security breach, Bitfinex announced the systematic redemption of 100% of all outstanding BFX tokens (a debt-backed token designed to represent users stolen equity, started by Bitfinex in a novel attempt to reimburse stolen funds), essentially reimbursing lost funds. And that where the importance of decentralized exchange came into picture.
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