Why we won't be using bit121......YET.

12/19/2013 05:07:00 pm Unknown 0 Comments

So we were as excited as anyone else at the news of UK's newest exchange actually going live, with UK banking in the form of Barclays being touted as being involved according to early reports.

However before taking the plunge into dealing with the new bit121 exchange we decided to first do our due diligence and make sure everything was above board and that we wouldn't be simply plying money into a useless exchange. Despite what the title of this article says it's not all bad news from bit121 but they definitely do need to address a few issues.

Contact details

First and foremost any company you deal with needs to be contacted, if they are based abroad (outside UK) then of course a phone number isn't very practical, however bit121 are UK based apparently, however they don't have any address details or telephone numbers to be contacted on, the only point of contact is an email address which is simply not enough to inspire confidence. Having said that, we did email our concerns to bit121 and were very impressed to have a reply within hours albeit just a reply saying our message had been  "passed to our CEO", It's still a good start. We will wait until they have at least a contact number or office address so they cannot vanish into the night.
We did a little digging on the CEO and found he is quite an experienced businessman according to his linkedin profile, which was also good sign.

Verification

In filling bit121's verification requirements you are actually giving them enough information to access your bank account which we are quite uncomfortable with and falling victim to identity fraud is then decided by how secure they
keep people's personal information. They could easily remedy this by simply
having their customers scan and send 2 pieces of i.d. No need for
mothers maiden names or length of time at current address or even home
telephone number. We do however really applaud their thorough attempts at adhering to UK's draconian anti money-laundering regulations, as we all know t
hat if there is a falling point for UK exchanges it will be red tape that shuts them down.

PacNet services 

Though we had yet to hear of PacNet services, they seem to be the link to Barclays Bank and quite a tenuous link at that, They don't seem to be based in the UK either although payment to them is done through Barclays Bank, How much Barclays actually know about a crypto exchange is unclear at the moment. Our worry is that when the exchange gathers momentum as it quickly will, can PacNet keep up? PacNet does appear to be a very professional outfit. More to the point will Barclays Bank be the first to harbour the currency which some say will make banks obsolete (we do not share that view), Barclays are not exactly a bank of the people, (Libor scandal anyone?) It's highly unlikely they will endorse the Bitcoin unless they really had to. We would perhaps feel better if Barclays endorsed the exchange, evidence of this should be on the bit121 website.






All in all, as far as bit121 is concerned we are advising to approach with caution, much like all exchanges only leave in fiat what you are prepared to loose, and transfer Bitcoins out to your local/offline wallet after every session. If you are going to use an exchange bitstamp may have a rival in the UK, Although the £10 deposit and withdrawl fee are a bit steep, the minimum deposit has recently dropped from £500 to £50. Scouring the forums we are yet to find any reports on the exchange from users, which screams that it may not be very liquid as yet.


We really hope bit121 addresses these issues and grows to become a useful exchange. only time will tell, but we will keep an eye on them and when we feel safe enough we will use them and let you all know how it goes.


Good luck bit121 :)


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