Bitoption, an exchange exclusively for derivatives, appeared briefly last week before its developers took it down to work out bugs. But CampBX founder Keyur Mithawala, whose background is in information security, is confident that within two months his exchange will become the first to offer short selling. The three-week-old exchange enabled margin trading and short selling during its trial period, he said, but disabled it after launch because there weren’t enough deposits. “This is not a brag, but we’ve been able to make it so all you need to do is enter price, enter quantity and that’s it,” he said.
Derivatives trading could go a long way in boosting the adoption rate among merchants, who would be more likely to use the jumpy currency if they could lock in prices with forward contracts. But adding complex financial instruments to a completely unregulated economy seems questionable, especially considering the fate of Bitomat.pl, which accidentally destroyed $222,700 worth of Bitcoins over the weekend. “Holy crap, that is crazy,” Boston-based software developer and Bitcoin enthusiast Alex Spitzer said when Betabeat asked him what had happened. “It’s like if I set up the Bank of America site on my home computer and forgot to back it up, and then rebuilt my machine,” he explained. “The problem with the Internet is that it is easy to make something look legitimate even if it is running with duct tape and twine.”
Buyers, beware. Bitcoin seems to be attracting traders with just enough knowledge to be dangerous. Betabeat’s office happens to be 10 blocks south of Meze Grill, a Mediterranean lunch spot on Eighth Avenue that recently started selling Bitcoins in addition to tasty salads and nutritious smoothies. So on Thursday we pooled $90 from coworkers and schlepped uptown in the heat to purchase a modest six BTC for research purposes. As advised, we used MyBitcoin.com, a popular Bitcoin “wallet” based in St. Kitts and Nevis, to transact the deal.
On Friday, MyBitcoin disappeared from the Internet with no explanation, taking our investment with it.
We sought answers in the #bitcoin-otc web chat. “I think they ran away with the Bitcoins,” someone known as Nanotube replied, softening the blow with a smiley face. Nanotube administers the IRC channel as well as bitcoin-otc.com, the most well-known forum for person-to-person Bitcoin trades; he’s working on a Ph.D in finance, he told Betabeat. “Maybe the owner is just on vacation, and the site went down … But if I had to bet, I’d bet you’ll never see your coins again.”