Hello, dear reader!
Remember when we announced a new category on the blog? Well, it’s here now.
In today’s session, NBC sat down with Paolo Ardoino, the CTO of Bitfinex, to discuss his journey so far in the crypto space.
So grab your popcorn, it’s gonna be an interesting read!
About Paolo Ardoino
Paolo Ardoino serves as the Chief Technology Officer of Bitfinex.
He has always been destined to fill this role from his earliest interaction with computers, quickly becoming obsessed with hardware, networks, and cryptography.
After his graduation from Genoa’s Computer Science University in 2008, Paolo started working as a researcher for a military project focused on high availability, self-recovering networks, and cryptography.
Throughout this role, Paolo refined his knowledge of distributed systems and experimented extensively with cryptography.
Interested in finance, Paolo began developing financial-related applications in 2010 and founded Fincluster as CTO in late 2013.
Backed by two financing investment rounds, Fincluster delivered an advanced, modern, and accessible web platform serving different clients with customization capabilities.
Fincluster developed a comprehensive, cloud-based financial application for advisors, fund managers, and institutions, and served numerous small and medium-sized companies throughout London, Milan, and Lugano.
Paolo eventually joined Bitfinex as Senior Software Developer in 2014, tasked with trading engine development, platform scalability, and high availability.
Later in 2016, Paolo transitioned to the role of CTO during which time he acquired a strong portfolio of different programming languages and developed a genuine passion for distributed systems, high-performance computing, and cloud platforms.
- LinkedIn: https://www.linkedin.com/in/paoloardoino?originalSubdomain=uk
- Twitter: https://twitter.com/paoloardoino?lang=en
Let’s now get to the interview.
Interview with Paolo Ardoino, Bitfinex CTO
1. Can we meet you, Sir?
Paolo Ardoino is the CTO of Bitfinex.
2. How and when did you get into cryptocurrency?
My interest in the space bloomed in 2012, after reading the Bitcoin white paper.
I was deeply inspired by the idea that people could take care of their own wealth without banks or other intermediaries, and that the millions of unbanked and underbanked worldwide could have access to financial services.
Eventually, I joined Bitfinex as Senior Software Developer in 2014 and was tasked with trading engine development, platform scalability, and high availability.
Later in 2016, I transitioned to the position of Chief Technology Officer, where I oversee the development team, evaluate new technologies and design, and develop the Bitfinex backend platform as Lead Backend Developer.
In 2022, I co-founded Holepunch, a fully unstoppable, highly-resilient P2P communication platform.
3. What led to the creation of Bitfinex?
Bitfinex was born at the dawn of the Bitcoin revolution, and everything we do is focused on creating simple, dependable, and accessible technology that promotes freedom.
It was one of the first cryptocurrency exchanges, founded in 2012 to deliver the finest trading experience for retail, professional, and institutional customers. Our focus has always been on providing the best standards.
Over the last decade, Bitfinex has worked relentlessly to educate customers about the benefits and attributes of Bitcoin and the blockchain, while providing a technically superior environment to buy, hold, and sell tokens.
At Bitfinex, our mission is to build state-of-the-art technology that enables people to transact and interact freely and privately. We believe that Bitcoin provides a technology and a payment solution that meets the need for a fast, efficient, and private service.
With no centralized servers and unnecessary intermediaries – and at near zero cost – it enables financial inclusion and financial freedom.
We are also inspired by the Bitcoin ethos of decentralization to develop peer-to-peer solutions that enable freedom of speech and are proud to be a major shareholder in Holepunch, which has pioneered distributed systems.
We strongly believe that mass acceptance of crypto is most likely to occur because of its permissionless features, and its ability to create a more open and equitable world.
4. What has been your experience in the crypto space and working as the CTO of Bitfinex?
It has been extremely rewarding to be a part of a movement that is looking to unlock financial freedom in communities across the world.
5. Share with us the challenges you have encountered in the crypto space and how you overcame them.
The crypto space has changed a lot over the last few years.
Periodically a new wave of speculation comes accompanied by new cryptocurrencies, which focus more on leveraging trending technologies than necessarily truly understanding them.
Part of my role has been to educate and speak about the difference between bitcoin and stablecoins versus other more speculative coins.
I believe crypto has a lot of potential to help the unbanked population as long as it’s understood as a freedom tool rather than a quick rich scheme.
Myself and everyone at Bitfinex is driven by the ethos of financial Freedom and we take on the challenge to educate the whole community about this.
6. How does Bitfinex stand out from other crypto exchanges?
Bitfinex has the deepest levels of liquidity for bitcoin, the world’s biggest cryptocurrency, and has a long history of resilience.
We offer state-of-the-art trading infrastructure that is fast, safe, and battle-hardened.
While rival exchanges suffer episodic downtime in periods of high volatility, Bitfinex has consistently provided impeccable services.
If you look at our cold crypto wallets, you can see that we are still one of the top 3 exchanges by wallet size and have both retail and institutional customers who utilize our platform daily.
More specifically, Bitfinex has become a hub for institutional trading of digital tokens with its offers of institutional-grade connectivity services, including co-location and proximity hosting.
We stand alone in the space as being able to deliver a level of trading performance that matches conventional financial markets.
Bitfinex also stands alone as one of the few exchanges that still pursue the opportunity to bring financial freedom to less-advantaged communities around the world.
Through Bitfinex Pay, it enables any customer who wishes to pay with crypto to buy from a wide variety of merchants.
Through Bitfinex Securities, we solve the problem of being able to raise capital quickly, cheaply, and efficiently for individuals and small companies that have trouble raising a loan or getting credit.
It is a trusted, regulated platform that investors and issuers can use to raise funds and access secondary markets.
7. What security measures does Bitfinex have in place to protect users’ funds?
The Bitfinex Security team is continually improving our end-to-end security measures, improving auditing processes, and reducing the attack surface of our infrastructure.
In terms of our cryptocurrency storage, the overwhelming majority of system funds are stored in offline, multi-signature cold wallets.
Only approximately 0.5% of crypto assets are accessible in hot wallets for day-to-day platform operation.
As an added protection, cold wallets are not available from the platform or the platform servers.
8. When time out occurs on exchanges, what really happens?
For example, when exchanges send out messages informing users of a time-out (disabling deposits and withdrawals) to resume at an agreed time, what really goes on within that period?
First of all, our level of service is based on excellence and we do everything we can to keep our communication transparent to our users. There are several reasons behind the time it can take.
One of them is that blockchain technology is often really new and unstable. Sometimes it could happen that blockchain nodes are failing and we need to organize maintenance and recovery.
Those types of processes require several hours of work of full teams to bring back the full functionality.
Another one is related to data centres or cloud providers used by the exchanges. It happens to have networking or infrastructure issues that require a deep investigation and hardware replacement to ensure stability in the operations.
Running an exchange is definitely not an easy task and at Bitfinex, we work hard to ensure the highest level of security, performance, and transparency that we owe to our users
9. How has the (recovering) bear market affected trading on Bitfinex?
Bitfinex operates with a “business as usual” attitude regardless of market conditions.
10. With the rave of Proof of Reserves among exchanges following the crash of FTX, will Bitfinex be carrying out a reserve audit soon?
All Bitfinex’s wallets are available for public view on our GitHub: https://github.com/bitfinexcom/pub/blob/main/wallets.txt.
Bitfinex is fully committed to providing transparency on the health of the exchange, and four years ago, began working on an in-house open-source library called Antani (https://github.com/bitfinexcom/antani), and its web-ui implementation – Ballot (https://github.com/bitfinexcom/ballot) to demonstrate exchange-wide proof of reserves.
Antani is a #nodejs library for efficiently proving solvency and delegated off-chain voting for crypto exchanges.
Bitfinex is committed to continuing to develop and implement the Ballot solution in order to provide periodic proof of reserves.
The Bitfinex whitepaper on Proof of Solvency, Custody, and Off-Chain delegated proof of vote is available here: https://github.com/bitfinexcom/bip/blob/master/proposals/001.md
11. Do you have any plans – personal and for Bitfinex that you’d love to share with us?
In 2023, we will predominantly be focusing on emerging markets and exploring new ways to bring financial services to those who need them most.
We believe this year will be focused on greater innovation, more transparency, freedom for everyone not served by traditional technologies and financial systems, and an end to practices that have tarnished our industry and obscured the promise that it holds.
We will also be focusing on the long-term development of the Bitfinex Securities platform.
We believe Security Tokens represent the next generation of capital markets.
By matching the technology of the digital asset industry with clearly defined issuer obligations, investor protection, and regulatory oversight, STOs offer investors and issuers a faster, cheaper, and lower friction way to invest, raise capital, and trade.
This sets the stage for an exciting 2023 for both Bitfinex Securities and STO markets more broadly.
12. What’s your outlook on cryptocurrency adoption in the coming years?
I think adoption is gathering ground fast. Cryptocurrency adoption has been growing rapidly over the last few years.
In 2021, global crypto ownership rates reached an average of 3.9%, with over 300 million crypto users worldwide, according to data from TripleA, a global cryptocurrency payment gateway.
In this sense, it is important to keep an eye on the Lightning Network.
The Lightning Network doesn’t have restrictions or barriers to entry and it’s available to anyone in the world that needs to transfer money, by using a peer-to-peer platform, without the need for an intermediary.
The benefits of the Lightning Network are critical in markets that have a high reliance on remittances and a strong dependence on the US dollar.
Overall, Bitfinex is at the forefront of promoting cryptocurrency adoption.
In many Emerging Markets, particularly where there is currency volatility, Bitcoin provides a store of value, a form of remittance, and a gateway to financial freedom.
There are 2 billion people who do not have a bank account because they are too poor and the banks do not want the costs of maintaining those accounts.
With Bitcoin, it can be stored for free on the blockchain and can be sent around the world at zero or very low costs.
We are also committed to providing a wide range of applications that enable the use of Bitcoin, beyond just a savings tool.
The impending launch of the Volcano Token will set another precedent demonstrating how emerging markets can use Bitcoin to tap access to capital and create a whole new economy.
13. What advice do you have for crypto newbies?
For exchanges, the main things are:
- Security – check if an exchange has had any previous incidents and how these incidents were resolved.
- Be sure to check what the recourse is for you if the funds in your wallet have been compromised.
- It is also helpful to check the liquidity of the exchange and possible issues faced in the past or ongoing with regard to liquidity.
- Very closely aligned to this is to check if the platform has a verification or Know Your Customer (KYC) process – which serves to protect against fraudulent account creation by verifying that the account holders are who they say they are.
Cyber scammers are always looking for new ways to commit fraud. Scammers are increasing in their sophistication.
One example is Cryptojacking – where hackers implant a piece of software that mines cryptocurrencies on a victim’s computer – further demonstrating that the ingenuity of cyber crooks should never be underestimated.
Unsuspecting victims are left perplexed as their devices slow down to a snail’s pace, unaware of the criminal activity and where it emanates from.
Whether you are a retail user or a business, you need to remain in a perpetual state of vigilance to guard against such threats.
To keep your account safe look at combining password protection and basic anti-phishing controls, which may add resiliency to Cryptojacking attempts.
It may seem obvious but users need to check the jurisdiction that the exchange operates in and whether they are able to make use of it.
And last but not least – Trading fees and spot prices charged during swaps/trades. These can sometimes be overlooked.
However, certain exchanges claim to have zero fees, but when using their swap/trading functions, you realize that the spot price used in the trades is a few percentage points higher than other exchanges.
Do your research, and understand the basics and how exchanges and wallets work. Understand the larger environment and the impact it may have on the industry as a whole.
Do your best to ensure that you know the risks associated with the market including understanding what’s happening in traditional markets and securing your wallet.
There is no such thing as too much security.