I worked in a cryptocurrency exchange. AMA

I worked in a cryptocurrency exchange. AMA
I invested in its series A in 2014, and was advisor to the chairman since that time.
Briefly I went in to help them launch the re-booted version of the exchange, so I spent about 3 months as full-time staff.
AMA about this experience.

Comments (40)

Sep 5, 2018

How stressful was it?

Sep 5, 2018

Medium. Actually quite fun.
It's working a tech company mostly, not like finance.
Every day was different because the market was ever-changing.
I got the impression most people weren't paid finance-level salaries.
Most of the time I was working on partnerships, setting up the new exchange, and licensure.
Others were working on site design and other aspects of the tech.
Get in at 9 or 9.30, leave at 6, no weekends.
Not a bad life, and you get to work in an exciting and dynamic industry.
Not much pay but if you got equity or tokens as a bonus you'd make crazy money.
My equity went up 20x.

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Sep 5, 2018

Do you think there are too many ICOs and is there a crypto bubble for the industry in general rather than one specific currency?

Sep 5, 2018
The Pharma Guy:

Do you think there are too many ICOs and is there a crypto bubble for the industry in general rather than one specific currency?

Too many ICOs, many which are frauds or of questionable value.
The bubble has probably collapsed considering the current low valuations.

Sep 6, 2018

low valuations

Based on what, exactly?

    • 1
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Sep 5, 2018

If you were to quantify the amount of drugs purchased with your particular currency, how many tons do you think that would equate to per year?

    • 1
Sep 6, 2018
Big4please:

If you were to quantify the amount of drugs purchased with your particular currency, how many tons do you think that would equate to per year?

ha ha. Funny. I said I worked at an exchange bro, not a crypto currency.

Sep 5, 2018

Will ETH rebound? It has been weak vs BitCoin recently. Will that change in the near future? Why?

just google it...you're welcome

Sep 6, 2018
faceslappingcompilation:

Will ETH rebound? It has been weak vs BitCoin recently. Will that change in the near future? Why?

To paraphrase Bobby Axlerod - cryptos are like pigs on LSD. You never know which way they're gonna run.

Sep 6, 2018

Speaking of which.. wtf happened to Bitcoin yesterday?

Sep 6, 2018

How well were you insulated from any legal action that would stem from general operations in a relatively grey area?

And if you work at the exchange I think you worked at (i.e. exchange utility token x knowing that you did China PE), yes, you would have made an absolute killing in equity hahaha (e.g. OKEx, BinanceCoin)

Cheers!

Sep 7, 2018
Dedline:

How well were you insulated from any legal action that would stem from general operations in a relatively grey area?

And if you work at the exchange I think you worked at (i.e. exchange utility token x knowing that you did China PE), yes, you would have made an absolute killing in equity hahaha (e.g. OKEx, BinanceCoin)

Cheers!

I think I'm pretty well insulated

Sep 9, 2018
Dedline:

How well were you insulated from any legal action that would stem from general operations in a relatively grey area?

And if you work at the exchange I think you worked at (i.e. exchange utility token x knowing that you did China PE), yes, you would have made an absolute killing in equity hahaha (e.g. OKEx, BinanceCoin)

Cheers!

Youre too smart

I will DM

Sep 7, 2018

Whats your view on some of the derivatives that are being offered on BitMex (perpetuals, quantos) and options on Deribit, crypto facilities..? Did you ever have conversations internally about offering these types of products?

Sep 7, 2018
billbo:

Whats your view on some of the derivatives that are being offered on BitMex (perpetuals, quantos) and options on Deribit, crypto facilities..? Did you ever have conversations internally about offering these types of products?

No opinion.
I helped build an exchange.
I didn't trade much.
I bought and sold a little but never exotic products / leverage / margin / derivatives.

I can tell you tho, the BitMex 3 founders are billionnaires now.
Getting laid off from Citi was great for them!

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Sep 7, 2018
billbo:

Whats your view on some of the derivatives that are being offered on BitMex (perpetuals, quantos) and options on Deribit, crypto facilities..? Did you ever have conversations internally about offering these types of products?

Our exchange did offer some exotics tho...

Sep 7, 2018

Did you have an internal market making desk on your exchange a la BitMex ? If so, how did you manage any supposed Chinese walls between external exchange user flows and the internal desk?

Sep 7, 2018
billbo:

Did you have an internal market making desk on your exchange a la BitMex ? If so, how did you manage any supposed Chinese walls between external exchange user flows and the internal desk?

I am less familiar w/ that part of exchange operations.
I don't think we did though.

Sep 7, 2018
  1. Given that most exchanges are currently hosted on cloud services (AWS/Google) how do you see this evolving over time? I get that, hosting on cloud services right now makes sense due to lack regulation, but as the space matures do you see any exchanges moving to physical servers and then opening up colocation space like in traditional market exchanges?
  2. Did your exchange offer some users (big clients) preferential latency? i.e. telling them which cloud instance you're on?
  3. Why did you decide to leave?
  4. Are your future plans still in the crypto space? If so, please could you elaborate on where you're heading?
Most Helpful
Sep 7, 2018
billbo:

1. Given that most exchanges are currently hosted on cloud services (AWS/Google) how do you see this evolving over time? I get that, hosting on cloud services right now makes sense due to lack regulation, but as the space matures do you see any exchanges moving to physical servers and then opening up colocation space like in traditional market exchanges?

  1. Did your exchange offer some users (big clients) preferential latency? i.e. telling them which cloud instance you're on?
  2. Why did you decide to leave?
  3. Are your future plans still in the crypto space? If so, please could you elaborate on where you're heading?

I'm pretty sure we did all our own hosting so I don't think the above applies.

I was fired because I have interpersonal issues with other members of the team.

I don't know if I will continue in crypto. I enjoyed being in a company and in tech, rather than PE/finance.
I'm not sure if I'll get a chance to get back in.
I'd like to be back in, but.... not sure how to get back in to tech.

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Sep 7, 2018

Thank you for hosting this AMA, not too enough crypto talk on this site. Series A in 2014...not sure if you were intending to hide the exchange, but I think this would narrow it down to two or three possibilities (assuming its one of the active ones).

  1. Where do you see the biggest pressures for someone operating a crypto exchange? Competition squeezing fees down? Regulation? Security? Ability to scale?
  2. What other products/services do you see crypto exchanges expanding into?
  3. Are there any liquidity/capital restrictions placed on crypto exchanges?
  4. Why did you decided to invest in the exchange that you did?
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Sep 7, 2018

Would you voluntarily put any of your net worth into crypto? If so, what percentage, which product and why?

Sep 7, 2018
Ironuts:

Would you voluntarily put any of your net worth into crypto? If so, what percentage, which product and why?

i put in a little.
Probably not a great idea tho.

Sep 8, 2018

Which product and why?

It's interesting that you opt to work in a sector you seem not to believe in. (I guess facilitating trading is the best place to be if you don't believe in the product! Selling pickaxes during a gold rush type thing.) I kind of assumed that people would seek out crypto related jobs having bought into the idea rather than end up there by accident which I assume you did?

Sep 9, 2018

To clarify, while I did put in a fair bit, given the volatility it's probably not great that I did so.
I have done well investing in tech equity and real estate.
We didn't do so well in crypto

Sep 9, 2018

I recently purchased a lot of RSK
It's smart contract on btc so a decent use case
But the price I paid sux
I will probably get hosed

Feb 11, 2019

I also got RSK but at ICO price aka more than it is now. RIP

Long term, it has a chance. Short term, nada. Buy more when it bottoms out and just wait. I DCA'd a few times so far, and it's been working. Had this one alt that I bought at 30 cents (ico price) and it dipped to 2 cents... I bought up a lot more (below 2 from friends who wanted out), and it's now sitting at 4 cents and moving up. No volume on the way down but it's showing life now. Sold half in profit and now just waiting for it to make it back to ICO price to make real $$. Seems like their market maker has finally been turned on (small volume so far but continual).

Crypto is a complete crapshoot. Shit that has no value pops off. Real tech companies may or may not increase their token value. I put in like $2k and at the top (in illiquid alts where I couldn't sell) my portfolio was a cool 1M. Hurt to see it fall like a rock, but I'm still way in profit. It's a fun hobby, but I wouldn't put more than 1k in if I were getting in now. Play around but don't bet anything important on crypto. We could be in for some lower lows here.

Sep 9, 2018

I am an ETH maximalist but these cryptoas are so volatile I am regretting my exposure

Feb 11, 2019

Eth maximalist? Why? Shit is about to go down when STOs and other chains start hosting ICOs. Personally, I think Fantom, Dusk, Binance, and a few other platform coins will do well. ETH has had it's day, and I do think it will increase in value. Not sure it'll hit 1k ever again though.

Jun 1, 2019

How do you feel knowing that what you're doing adds 0 value to society as cryptos have no intrinsic value?

Jun 1, 2019

What skills do I need to have to work there? Was it nervous?

Jun 4, 2019

I worked on the cryptocurrency exchange and I can say that it depends on your functions. You can be a developer, manager or work in support

Jun 7, 2019

I guess working in support might be very nervous

Jun 5, 2019
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Jun 8, 2019
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