FokLog spoke to Konstantin Gladych, CEO and co-founder of Changelly, during BlockShow Europe 2018 in Berlin, where he took the stage to talk about centralized and decentralized exchanges.
Changelly is an instant digital currency exchange that rapidly drew attention of the community and, despite some heavy criticism for their KYC policy and allegedly hostaging some of the clients’ funds, already boasts, according to the company, over 1.5m users.
Calling himself a blockchain maximalistm, Konstantin is also acting as an advisor for Cindicator, hybrid Intelligence for financial markets, and Genesis Vision, the platform for the private trust management market. Apart from that, he is also CBDO at Atomic Wallet at some point in the past Konstantin advised for MinerGate mining pool.
ForkLog: Hello Kostantin, let’s first talk about Changelly project itself. How did you come to the idea of creating a platform like this, specifically that by that time ShapeShift, which offers pretty much the same functionality, had already been around?
Konstantin Gladych: Yeah, that’s true. Shapeshift started about two before us, and when we actually entered the market, which happened about three years ago, we saw that ShapeShift was the only company and we understood that we can build the competition.
Also at that time I was advising MinerGate mining pool, which was a huge mining pool focused on Monero and other CryptoNight currencies like Bytecoin, and we saw that people still needed an option to exchange their mined coins to Bitcoin. So we got our first customers from MinerGate and after that we decided to open the service to a lot more customers. We also partnered with CoinMarketCap, it’s our biggest affiliate partner, and we also offer exchange option via a few wallets.
I have full respect to ShapeShift and what they are doing, but what we actually realized that even if you use ShapeShift it’s not so smooth process. Maybe we are doing pretty similar exchange product now with similar customers, but what we also understand is that only market competition can drive services so that they become better for customers.
So what we have today on Changelly is that there are no amount restrictions, you can exchange huge volumes. Our biggest transaction ever was 500 BTC and we processed it really smoothly, in half an hour or so, and that’s the main competitive advantage for us.
ForkLog: What are the weak points of platforms like yours?
Konstantin Gladych: In comparison to classic exchanges like Binance is that there you can do a deposit and after that you can trade using different algorithms. Maybe the weak points are the slippage and the rates as you don’t have fixed rates, like people are buying Ethereum or Litecoin and they should wait for confirmations and the currency price is going up.
So maybe I can assume that’s not even a weak point but rather a functionality we offer.
ForkLog: You have mentioned exchange option in some wallets. As it was reported earlier, there are such partnerships with Freewallet, Jaxx, and Breadwallet to name a few. Do you actually have any plans regarding any hardware wallets like Ledger or Trezor?
Konstantin Gladych: Recently I’ve spent a week at Consensus 2018 and at the breakfast with Ledger president [Pascal Gauthier – ForkLog] we discussed possible integrations, so let’s say yes, at some point Changelly will be integrated with Ledger.
Also we have partnership with Trezor guys, but unfortunately Trezor is much smaller than Ledger.
— BlockShow (@BlockShowcom) 28 мая 2018 г.
ForkLog: During your talk on stage you have mentioned atomic swaps saying that you are a big fan of them. At the same time there is widespread opinion that atomic swaps could literaturely be a threat to platforms like Changelly and their business models.
Konstantin Gladych: I don’t think so, even if I love atomic swaps they are pretty slow and it’s not so perfect experience if you want to exchange funds. It’s more expensive than Changelly. If you are talking about the smaller transactions, it’s a better option for you to use Changelly or ShapeShift or any other similar service. If you are talking about larger transactions, especially for OTC-trading, and you want to do it trustless and truly anonymous atomic swaps is the only way to do that.
But, again, you have to wait for confirmations and you have to make four transactions and it’s more expensive than even bitcoin transactions. You should wait for other side that should be online and it’s mostly like LocalBitcoins experience. And they are also unavailable for high-frequency trading.
Anyway, I think the both markets will co-exist.
ForkLog: With Bitcoin and other cryptos falling so heavily down after the December 2017 historical heights, what’s your take on the current situation on the cryptocurrency market in general? How do you see the mid-term and long-term future for Bitcoin and the whole ecosystem?
Konstantin Gladych: Markets are always growing by the waves and now we are expecting the next wave. The market is really flat now, the last month and the previous month there was pretty similar exchange volume. Surely, it’s less than in the December when it was absolutely crazy. It all depends on regulation actually. I know that Goldman Sachs applied for BitLicense, and we should expect the next wave when they go with the product for institutional investors. Coinbase is also working on such products, so you have to prepare for the next way.
Also, if you see the Mt Gox crash, it took the market a few years to recover, but now I believe it will take half a year, one year, but not more.