Interview with Bitfinex CTO: Bitcoin halving, coronavirus, DEX, and ideal exchange

Coinstelrgram agency CEO Anna Tutova and UK BDM Malik Saqib Hayat attended the leading digital asset conference in Europe – СryptoСompare Digital Asset Summit, where they managed to communicate with industry-famous personalities.

Coinstelegram team interviewed Paolo Ardoino, CTO Bitfinex — one of the world’s leading digital asset trading platform, with a daily turnover exceeding $ 260 million. Also, Paolo holds a similar position in the Tether project, which is the most popular stablecoin among all cryptocurrencies. In the conversation, they touched the current situation in the cryptocurrency market, the sphere of cryptocurrency exchanges and trading, and also talked about the prospects of the industry.

Anna Tutova: Hello! So, we are now in London at Crypto Compare Conference and our guest is CTO of Bitfinex, Paolo Ardoino. Nice to meet you!

Nice to meet you too! Thank you for having me!

Anna Tutova: So, can you tell us how did your career start with Bitfinex and Tether? 

Sure. So, I’ve been a coder and developer all my life. I started coding at the age of eight and from there I kept through with that till today. So, after graduation in Computer Science, in University in Italy, I did some research projects and then, moved, eventually, to finance to build a background that they could spend money.

And I created my own startup platform. It was all going well, but after a few years I felt a bit bored because I was going and looking, it was like 2012: it doesn’t look well and it doesn’t work. And I said: “Well, I wish I had a job in the fintech crypto industry”. And then, I meet Joe Carlo Lucia from “Bitfinex”. He started to say: “Well, why you don’t help us? We need a platform”. Because at that time, a change was either an increase in global change. So, my main role there was trying to improve the performance of the platform. It was like doing the 15 trades just per second. After a few months, it went to a thousand, and thousand to a million like even more per second. So, in 2016 I got the offer of a position of a CTO to rebuild the platform, reboot the platform, and bring that to what it is today. So, in late 2017, I was offered also a position of CTO of Tether, where I managed, ensured the security of the processes of all the blockchains that we supported, and so on. So, basically, I signed with them as CTO, and I also served as a product manager, because, I really do care about the focus statics, the functionality and the liquidity of the product. I really had to be proud of the product offering to my customers.

Anna Tutova: And what are other plans for new products of Bitfinex and Tether?

So, on the Tether side, we’ ve just launched «Tether gold» that has been a real breakthrough in the market. So, Tether gold is a great product. It is an offer of a fully-packed gold-silver coin. We have seen a lot of rejoicing from institutional traders. Because it is for the first time, they have an asset that cannot be arbitraged with traditional finance, and they can use it to hedge their risk.

So, that is one of the most interesting things for me – trying to build products that are effortlessly useful for the emergency. And we are also working with two other blockchains for Tether. I can not share yet names but we have the other supporters in the pipeline.

Then, on the Bitfinex side, we’re just to launch a latter smart form, we added B2C Ethereum swaps, flops. And we’ve just launched “Tether gold” futures. That is, I think, massive because it will improve also the ability of hedging that will enable an account go first, or the CIV – you can hedge your position or arbitrage your position against Bitfinex. I think it is a beautiful example of arbitrage between a crypto exchange and a traditional fund exchange. Then, we are also working to add additional products like staking platforms, a news resolution platform for where news outlets can join and publish their news store resource. We are working on new options. So, in Q2, Q3 we will have our options platform ready. So that we’ ll complete our product offer because Bitfinex is like one «stop-shop». The spot market, margin funding, margin trading, futures, and options. So, that is basically is our plan to go in 2020.

Anna Tutova: And what do you think about this current situation on markets with this coronavirus, and this downfall on the stock market, oil market, and the cryptocurrency? And do you think that crypto can be a safe haven or is it rather gold? And how can they be connected with developments of Tether gold? 

So, that’s a good question. I believe that most people expected bitcoin, a cryptocurrency to be a safe haven during this period of crisis while instead of the stock market and oil market, all that was dragged down, in also the crypto industry. So, that was quite a misconception, but I believe that the market is still too young to be completely non-correlated to the traditional assets. So, I believe that what we have seen in past days is more of the pandemic.

Anna Tutova: What is your opinion on the centralized exchanges and are there any plans of Bitfinex to launch separate decentralized exchange?

So Bitfinex totally works on a non-extraordinary chain trained «Addfinex», non-custodial exchange, using Bitfinex utility, and then, Eosfinex, that is a full on-chain matching engine. So, one problem that I can see is that usually when these DEXs are launched the project thinks that they are not subject to regulations. And, I mean, that is not true. I believe that even if you are launching a project, even if you are launching a DEX, that is fully blockchain like there  – you are still subject to regulations. Because, in the end, there is a group of people, a company who will benefit from the trading fees or there is the token that is held by a group of people that will benefit. So that regulations will freely attack or will go after that group of people. So, it’s correct and it’s normal that decentralized exchanges will have to follow the same regulations, the same standard of centralized exchanges. The only way to offer affordable decentralized exchange is not to put everything on-chain but to have a single group of people that are benefiting from it. Here’s to create, what is called, a «peer-to-peer» exchange, where everyone runs their own small note, their own matching engine, their own trading platform, and there are thousands small trading platforms and everyone is acting by himself, and there will be a liquidity provider moving the liquidity across all of these notes. But here’s how it should be done and I don’ t believe that on-chain DEXes will be able to solve a regulatory problem.

Anna Tutova: What are the current challenges for Bitfinex and Tether? As well, as I know, the trial for the manipulations on the market for Bitfinex is still going on?

No, I cannot go to be deep in details, because it is not my role. I’m a technical guy, I`m CTO, but what I can say is that Tether is growing. You can see that the monetary base of Tether keeps growing. The major competitor is stuck at $450 000 000 USD in one year. Tether keeps growing. So, there is a big trust in Tether. There is no way that Tether participated in any manipulations. If so, my presentation is this: in 2017, 2018 there was a massive interest in Tether. All projects were listening to Tether. It’s normal that the growth of Tether was massive at that time just because people were so eager to enter markets that used Tether as a fiat ramp. So, there is nothing there, I mean, if there is, we will be able to make our cases in currencies, it’s not a big deal. 

Anna Tutova: Thanks for this. And as for the markets, what is your price prediction for bitcoin?

I’ m pretty bullish on bitcoin, I believe, that Bitcoin is going higher, than it’s today, in 2020. I believe that there will be a halving. Of course, the price of bitcoin will be much higher. So, it will be, basically, twice on year. So, from a purely financial point of view, I can see how we will maintain like this: it has to go higher, might be. Sure. So to shoot a number there will be around 20K. 

Malik Saqib Hayat:  As you are a CTO of Bitfinex and you have a technical background, how would you describe an ideal exchange from a user perspective?

So, the traditional user’s perspective is Bitfinex. It has a beautiful interface, super-fast APIs. For the cyber pound guy that is in me, it’s a «peer-to-peer» exchange with Lightning Network integrated for settlements and Tether on top of Lightning Network. So, you have bitcoin, Tether on Lightning Network and you have every… Do you know «raspberries»? Raspberries are small hardware you can restore at home, right? I imagine a world where everyone runs their own small exchange and they are all interconnected by market makers, arbitrageurs, and they use Lightning Network to settle transactions. So, that is my ideal, like a futuristic exchange.

Malik Saqib Hayat: So, are we getting closer to that ideal, are you working on it? Or is there something in a pipeline?

In my spare time, I work on it. And I haven’ t my spare time but I’ve already called lots of stuff around that just because, I like, you know, my life is only about coding. That’s my expertise in the centralizing systems. So, I work in that direction.

Malik Saqib Hayat: If you can go back and travel in time, and it’ s 2009 and you are about to introduce a new currency or cryptocurrency, which we know today as a bitcoin, how would you have done it? Would you have done it in the same lines and rules or it would have been different from your prospective, what is missing?

I think, that I couldn’t have done a better job than this. I believe that’s the great thing that Satoshi did was to disappear and he left Bitcoin in the hands of a community. I mean if a community wasn’t able to take a debt responsibility and bring it to the mainstream, that it was anyway a fail project. You can not have one single person taking charge of this impressive technology and this game that changing technology. So he did the right thing, he tried to grow it a little bit, for a few years, and then, he left, then the community took over. I really loved how it was done! I couldn’t have executed better. You know, sometimes the pride comes into play, and sometimes, when people start using it – you don’t want to leave, you feel the urge to tell the world: «I’m the guy who did it!». And he did have that! And it was quite great to see!

Malik Saqib Hayat: Brilliant! Thank you so much for your time. Good luck with your further developments! Cheers!

Thank you. Thank you for having me!


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