Coinpit is taking significant and innovative steps to offer a safer alternative to Bitcoin’s custodial futures exchanges. Thanks to Bitcoin’s multi-signature technology, users that store bitcoins on Coinpit remain in complete control of their funds. Even if the exchange is hacked, goes bankrupt, or disappears completely, customers can in most cases still retrieve their money.
Speaking to Bitcoin Magazine, Coinpit Founder and CEO Bharath Rao explained why he believes trustless exchanges are an important next step for the Bitcoin industry.
“Why is a bitcoin worth 600 times the world reserve currency? Because there was an unmet hunger for a trustless currency. We want to bring the same properties from the currency layer into financial systems. A financial system with the properties of Bitcoin would eliminate many financial crises,” Rao said.
Coinpit is no regular exchange, where users exchange bitcoin for fiat currency and back. It’s a bitcoin-futures exchange, where users trade so-called “quanto USD/BTC contracts.” In plain English, this means that Coinpit customers “bet” against each other, allowing them to speculate on bitcoin price movements.
“The bitcoin prices we use are derived from the top USD/BTC exchanges,” explained Rao, himself a Wall Street veteran. “And our index is arbitrable. This means