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Interview with Nathan Worsley, Chief Technical Officer of LocalCoinSwap
Can you introduce yourself and your role in LocalCoinSwap?
My name is Nathan and I’m the Chief Technical Officer with LocalCoinSwap. I’ve been involved in this project for a number of years and assisted in the development of the idea behind the project.
What is your experience in cryptocurrencies?
It was early 2011 when I suddenly got extremely sick with a condition that affected my balance. The room wouldn’t stop spinning and I got so ill that I began to find walking difficult, so I spent more than a month completely bedridden, with only the Internet for company.
It was during that period of my life when I stumbled across the Satoshi Nakamoto Whitepaper: Bitcoin: A peer-to-peer electronic cash system.
It was the most mind-blowing thing I’d ever read. Naturally, the only logical thing to do was to put my life savings into it, a few thousand dollars at the time. I just knew that this was something revolutionary and I wanted to be part of it.
In December 2013 I sold enough of my original investment that I was able quit my job and begin studying Economics at university. I used the remaining funds as seed money to begin developing trading algorithms.
I knew that cryptocurrency was going to change the financial system, but I didn’t properly understand the financial system, so I resolved to change that during my studies.
Economics is something I’m passionate about and I learned a lot during my studies, but I was in many ways left very disappointed. We learned over and over again about the Macroeconomic models that govern the monetary systems we live under. However, we never learned to question the assumptions underpinning them or try and envision something better.
Academic Economics is in many ways an attempt to understand rather than attempt to change. So despite my deep respect for the field, I feel obligated to try and make much of my formal education obsolete.
It was during my development of trading algorithms that I came face to face with some of the practices that mainstream exchanges engage in.
During my data analysis of orderbooks on mainstream exchanges I began to see direct evidence of front-running, wash trading and insider manipulation. Orderbooks would be presented to the public with the arbitrage profits already removed… Obviously fake trades occurred to pump up volume at critical times… Big orders would be placed just in time for major market announcements.
This is the kind of stuff that people would be jailed for in traditional markets, and it is happening right in front of our eyes on a massive scale!
It was at that point I decided that rather than being at the mercy of these unfair practices, I would figure out a way to fix things. It took a few years for the idea to properly come together, but that’s the very beginning of how the LocalCoinSwap philosophy emerged.
Do you have videos of the team members or conference attendance or scheduled video AMAs about LocalCoinSwap?
Our Chief Marketing Officer Val is speaking at a March 23rd Blockchain conference in Brisbane, and in weeks to come we are planning some video responses to community questions. We don’t have a huge team and our project involves a lot of coding, so it’s hard to effectively delegate time to ‘hang out’. But we understand the importance of putting faces to projects so we have some cool video stuff in the works!
At what stage is the LocalCoinSwap software? Would it be possible to share some screens?
We’re still deeply in the back-end at the moment, with about 70% of features implemented. For security we’ve taken a ‘back-end first’ approach with modular implementation of features only after extensive testing. Currently the user authentication and security system is 100% complete (it was the first thing we built), as well as most of the trading interface and some of the social media features. We still have quite a lot of front end design to go, as well as coin addition. Coin addition is something that is very dependent on our ICO. We can definitely do the top 10, but we want to do as many as humanely possible as quickly as possible.
There will be a display of the trading interface on our new site which is about to launch before our presale starts, and some more prototypes available during the main ICO period.
Will the marketing be organized internally or externally marketing?
We are doing both. Internally we are creating and releasing content to educate the public about the project. Externally we have also hired an independent marketing agency to work with us closer to the presale.
One of the great things about running this ICO event, is that is assists in organically marketing the platform. Many of the users of the platform will be the Cryptoshare-holders who invest during the presale and ICO.
How does LocalCoinSwap differentiate itself from the competition?
There are a lot of exchanges out there right now, and many of them call themselves decentralized. But we are the first exchange to decentralize all of the profits.
The key difference is that when you use LocalCoinSwap, you aren’t just using our exchange – you are using YOUR exchange. You get the profits, you get the coins, you get to make the decisions. There is no monopoly, everyone benefits together.
I’m sick of seeing the worst elements of the traditional financial system present in cryptocurrency: monopolies, greed, manipulation, insider advantage. Let’s change that together!
When will the website LocalCoinSwap be launched?
Our initial launch is planned before the end of August, however the amount of features and coins available on launch depends on the ICO. The main goal of the ICO, apart from building the trading community in advance of launch, is be able to hire as many extra full-time developers as possible to implement additional coins and features faster. If our ICO is successful (and we are confident it will be) we are going to have an entire team dedicated solely to coin implementation. No other exchange has that right now.
What are the benefits of an ICO using LocalCoinSwap? What is the fee structure to use LocalCoinSwap?
Right now the barriers to entry to get your ICO taken seriously are crazy high.
I’m not going to name any names, but only yesterday we approached one of the biggest mainstream cryptocurrency news site about our idea. They sent an email back telling us their fee was $500,000 USD and that included writing a Whitepaper, and posting fake reviews on forums.
We told them we didn’t need a Whitepaper written or fake marketing, we just wanted to help educate the public about our idea. The replied back that we could either pay them half a million or go elsewhere.
This kind of “pay for play” in the ICO world is rampant right now, it really drowns out the smaller projects with better ideas from getting noticed.
We want to stop this! We’re going to reduce barriers to entry and create a way for smaller teams with great ideas to raise funding, get leverage in the market, and be noticed. We aren’t going to extort ICOs for millions, the only fee we ask in return for listing them is that they provide some free tokens to airdrop to our user base, and help us if necessary with the technical specifications of their project so we can put it on the exchange.
Do the traders on LocalCoinSwap need to be regulated?
LocalCoinSwap doesn’t discriminate on geographical region, our aim is to support all traders everywhere to freely exchange. So naturally, the exact laws for traders are going to depend on where they are located. No exchange has the resources to hire a legal team in every country of the world, so it is the responsibility of traders to ensure they are properly following the rules of their particular jurisdiction.
How are the buyers and sellers protected?
There are 3 ways we protect buyers and sellers:
1. Protection from hackers
We keep 95% of sites funds in a cold wallet, and implement secondary servers responsible only for intrusion detection. Additionally, all staff are equipped with emergency abilities to lock down the servers while we investigate suspicious activity further.
2. Protection from fraud and theft
By providing an escrow service, we protect our users from risks associated with fraud and theft while trading digital currency for fiat currency. As we handle the cryptocurrency portion of the transaction, we can investigate all disputes and ensure that fraudsters are not able to trick sellers into parting with their funds.
We are also planning to write some best practices manuals for different payment methods, based on my own experience as a peer-to-peer trader, so traders have some guidelines on the best ways to handle sales without the risk of man-in-the-middle attacks or payment reversals.
3. Protection from invasion of their privacy
This is the one thing I feel I didn’t go in-depth about enough in our Whitepaper. The privacy of our users is extremely important to all of our staff. We don’t want to know any more than we have to in order to escrow your trades, and we don’t want to keep history of your conversations or payment details on records.
After trades between users are completed we wipe all the payment data and messages immediately, keeping only the feedback. Post launch we will investigate the viability of incorporating end-to-end encryption into the trading process.
How will the venture fund be used?
We wanted to implement a mechanism where the community could direct the growth of LocalCoinSwap beyond just the exchange itself. We knew that some of the best ideas for this project would likely come around after launch from the user base, and wanted a way that people could put them into practice.
For example, even in the early stages of this project, we already have some of our community members on Telegram contributing some great ideas – such as expressly supporting all forks (Thanks L L).
With a community venture fund available we can get these new ideas, put them to a vote, and if supported by a majority of the community we already have the resources to make them happen.
What is the utility of the token?
There are 3 types of utility which are derived from Cryptoshares:
1. Dividend payments received from all Cryptocurrencies traded on the LocalCoinSwap exchange.
2. Airdrops of new tokens listed on the platform.
3. Ability to vote in the running of the exchange itself using a proof-of-stake system.
There’s always the additional benefit of a potential increase in price, but we feel it’s unprofessional to publically speculate about things like this.