[JOA] From Mt. Gox: The history of crypto exchanges

[JOA] ③From Mt. Gox: The history of crypto exchanges Ever since the advent of bitcoin, the cryptocurrency industry has gone through turbulent times. Cryptocurrency exchanges, among others, have brought some of the biggest changes to the industry. They played a major role in shaping out what bitcoin is today. This article examines the cryptocurrency business over the past decade. From the advent of the world’s first exchange to Mt. Gox incident and the start of Korbit, this article will examine the history of cryptocurrency inside and outside of Korea. #Mt. Gox, from heaven to hell Even those who are not familiar with cryptocurrency might have heard of Mt. Gox. It is just that famous. Mt. Gox was launched in July 2010 by Jet McCaleb, the developer of peer-to-peer platform eDonkey. McCaleb then handed over Mt. Gox to Mark Karpeles in 2011 and went to serve as the CTO of Ripple. In just three years with Karpeles at the wheel, Mt. Gox emerged as one of the biggest cryptocurrency exchanges in the world. Its market share reached 80 percent at one point. It isn’t an exaggeration to say that almost all cryptocurrency traders used Mt. Gox. Then the big incident happened. In Feb. 2014, Mt. Gox, out of nowhere, filed for bankruptcy. Nearly 850,000 bitcoin, which at that time was valued at $473 million, disappeared due to hacking, Mt. Gox claimed. That was nearly 7 percent of all bitcoin issued in the world. With an increasing number of victims, the credibility of the exchange nosedived as well as the value of bitcoin. It was no longer a problem that was limited to Mt. Gox but was a crisis for the business overall. The incident is still ongoing, as the discussion on compensation hasn’t been concluded. #The world’s largest crypto margin exchange Bitmet, and CME·Bakkt In 2018, Bitmex emerged as a major player in the industry. Arthur Hayes, the company founder and CEO, launched the company in 2014 based on his experience at major financial institutions, such as Deutsche Bank and Citi Bank. His expertise was derivatives investment, such as in futures, indexes and swaps. When the cryptocurrency biz was in recession, Bitmex came under the spotlight for providing short selling and leverage. Now it is the biggest margin trading platform for cryptocurrency. Rivals to Bitmex soon came about as well represented by conventional institutions such as the Chicago Mercantile Exchange (CME) and Bakkt. CME is a derivatives exchange established in 1874. It advanced into cryptocurrency trading in 2017 by offering bitcoin futures. With the advent of CME in cryptocurrency business, the industry was hopeful that bitcoin would finally be accepted by traditional financial institutions. In the past four months, daily cryptocurrency trading on CME reached $376 million. #What about the Korea exchange? Korea’s cryptocurrency exchanges faced major changes in 2017. Upbit, launched by fintech company Dunamu in 2017, is a representative case. Upbit, unlike existing platforms, focused more on alternative coins rather than major ones. For more effective operation, Upbit started to share its order book with Bitrex. The result was successful. Upbit’s daily average trading reached 5 trillion won just two months after launch. On the back of Upbit’s success, other small and unique exchanges also started to emerge. Another major change is expected this year as the financial regulator passed a special law regarding cryptocurrency, which allows for virtual currency within traditional finance. It’s not clear how big a difference it will make once it is in effect in March. But what is sure is that the dynamic history of cryptocurrency has not ended yet. Join.D is starting a live YouTube show which will be uploaded every Thursday 9 p.m. Aprobit has sponsored the series. ①The Korea finance act: What is to become of domestic exchanges? ②Bitcoin halving: How will it affect BTC prices? ③From Mt. Gox: The history of crypto exchanges

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