Chinese Bitcoin App BitKan Adds Over-the-Counter Trading Feature
The BitKan app, launched 2013, has added an OTC (over-the-counter) trading feature to its app that is already popular in China.
The Chinese company BitKan, which launched in 2013, has added an OTC (over-the-counter) trading feature to its app available for overseas markets. The feature is already popular in China.
This follows the conclusion of its first round of funding, where it received a $2 million investment from Bitmain.
OTC trading feature added
In April, BitKan received $2 million of investment from the Chinese Bitcoin mining hardware company, Bitmain in its A-round of funding, allowing it to launch over-the-counter trading via its app in May. Over-the-counter trading differs from exchange trading in that trading is done directly between two parties, without any supervision of an exchange. The company explained to Cointelegraph:
“BitKan OTC is based on platform-level trade matching. Two types of users exist on BitKan - one is the ‘trader’, the other ‘general’. A ‘trader’ can be seen as a fiat-bitcoin exchange while a ‘general’ as the exchange’s client. The general user is able to use fiat to trade bitcoin and vice versa.
When trading, the system will match a general user with an appropriate ‘trader’; the ‘trader’ has pre-set trading tactics and waits for the client to knock on his door. BitKan will, according to local laws and regulations, perform KYC checks on the ‘trader’ as well as the ‘general’ user. For ‘brokers’, an extra layer of trader qualification checks do exist to ensure that they provide better service to the ‘general’ users.”
However, for those concerned about giving away an excess of information through KYC/AML compliance, the company contends that while it will comply with the laws and regulations from relevant jurisdictions, it will simplify the checking procedures and make the process as user-friendly as possible, while also minimizing the obstructions of these checks in small transactions.
Despite having only be launched less than a month ago, BitKan claims its operation data indicates million-USD-level trades being concluded, with daily trading volumes regularly exceeding $1 million.
So far the operating data came from the CNY-based market as July 4 is the first day of opening the USD-based trade.
BitKan says the company’s motivations behind introducing OTC to their app are to allow people to hold and use Bitcoin in a much more convenient fashion.
BitKan records all OTC transactions off-chain, meaning sellers need to “charge” Bitcoin to the BitKan platform. BitKan founder, Edward Liu, says this is due to capital security concerns:
“BitKan adopts a 100% reserve funds mechanism. There are several solutions in terms of the manifestation of our 100% reserve funds, such as the “Merkle Approach” or functional chain and off chain wallets, but these solutions are flawed. We will integrate solutions comprehensively and adopt an easy-to-use solution that is capable of protecting the privacy of our users and the platform alike.”
BitKan added that it expects to join the Lightning Network when it matures, citing its fast transaction speed as the driving factor behind their decision.
BitKan is far from the only company on the market offering OTC trading to customers. However, Liu explains why BitKan promises to be more advantageous than well-established competitors like LocalBitcoins:
“LocalBitcoins may be one of the big players in OTC trading, but its usability issues cause ordinary users to become lost in the beginning. We tested BitKan’s closed beta version on a few newbies, and they were able to perform trading easy and fast. It only takes 3-5 mins for an ordinary new user to sign in and commence trading. This significantly reduces OTC users’ learning time. Moreover, the commission of LBC is 1%, while BitKan’s promotion offers a 0.1% commission, 1/10 of that of LBC.”
Before the introduction of OTC trading, the app already featured a number of features aimed at helping market speculators to trade efficiently and effectively, namely real-time quotations, industry news, trading, mining and bonus-based social media campaigns.
Further updates to the app will allow users to pick individual brokers, aimed at those who would prefer to personally choose their brokers. Nonetheless, BitKan says that the system’s default should provide the vast majority of users with the functions they need.
The company says the app enjoys considerable popularity among the Chinese cryptocurrency community, and is available across the globe on both Android and iOS.