A few days ago I received an email from Coinsetter, an up and coming New York based Bitcoin trading platform, informing me that I was invited to try out the site as a beta tester. I could hardly wait to give it a whirl. Although I am very happy with CoinRNR for being able to quickly sell my Bitcoins when I need fiat, I also like to use a full blown exchange when I’m not in a hurry so that I can set a price I’d like to get for my Bitcoins and not be forced to take or leave the listed price. I really do miss being able to use Camp BX since they quit processing ACH transfers to my bank.
I finally got some time to focus on it today, so I used the beta code they sent me to register my account. The registration process went smoothly enough. There were some steps I had to go through before I could trade, including verifying my identity. I hesitated slightly but went ahead and submitted the required documentation. I understand that the United States has some pretty stringent know your customer (KYC) rules. I don’t necessarily like having to be verified personally, but at this point I don’t want to make an issue out of it. I submit this sort of documentation and information if I want to open up a new bank account.
The next step in the process was to indicate my preferred currency. I was given two choices: US Dollars and Bitcoin. Only, I really only had once option, as US Dollar deposits and withdrawals are not yet available to US customers. So I selected Bitcoin, mainly because I wanted to see what came next. I was then led to a screen where I could either deposit or withdraw Bitcoin. I looked over the deposit Bitcoin screen and it was pretty straightforward. Send Bitcoin to this address and it will fund your account. There was also the disclaimer that at this time deposits are handled manually so it could take some time for the funds to get credited to my account. Fair enough.
That’s nice, how about withdrawing Bitcoin? I checked out that screen even though my account has nothing in it. I was prompted to choose my address, and it was made very clear to me that this was the only address I could ever use to make withdrawals. I selected my PC wallet client address. By this point I was pretty sure I would not be sending any funds to this account for quite some time. Only one permanent Bitcoin address? What cryptoplanet are these people from? Don’t they understand that Bitcoin addresses are subject to change, even encouraged to be changed, frequently? So what happens if I set my PC wallet client address as my permanent address and then my hard drive fries and I failed to make a timely back up of my wallet files? Would I then be doomed to keep my Bitcoin forever in limbo? Or suppose this was several months ago and I set my Inputs.io address as my permanent address. Would I then be forced to retain an address that might allow funds in but not out… forever?
Before I even got to the part where I set my Bitcoin address (which remained permanent even after the site informed me that I couldn’t withdraw at this time because I had no funds in the account), I was told that once I selected a deposit/withdraw currency, that choice too was permanent and I would only be able to deposit and withdraw funds in the currency I chose. Since I only had one option, Bitcoin, this means that from now on I can only deposit or withdraw Bitcoin. So, if I deposit some Bitcoin I earned, I could go ahead and trade it for Dollars on the platform. But then I have to trade it back into Bitcoin before I could get the funds out again. So… what’s the point?
It would have been nice if I’d realized just how limiting this platform was before I’d sent them my verification information and documents, because they are now wasting bandwidth to store information about someone who has no use for their product. And I suspect I’m not the only such “customer.” What is the use of an exchange that doesn’t allow its customers to… exchange? And a permanent Bitcoin address? Who’s ever heard of such a thing? It would be fine if they asked for some additional verification and wait time when processing a user request to change an address–making that process inconvenient does have some asset protection value–but there absolutely has to be away to make that change.
So my beta test of Coinsetter lasted around fifteen minutes, long enough to complete the registration process and then decide that at least for now it isn’t for me. I suspect the owners are very used to the fiat financial scene and want to get their foot into the Bitcoin door. I suggest that they spend a bit more time learning about how Bitcoin actually works, and playing around with it themselves, maybe even getting burned in a scam or two. Then the problems with their site’s missing features would become as blatantly obvious to them as they are to me, and they wouldn’t look like such Bitcoin noobs. There is of course nothing wrong with being a Bitcoin noob, but it might help to get some experience before setting up something as ambitions as a trading platform.