Now that Bitfinex has announced their plan to issue a BFXCoin to its users, things are getting even more confusing in the cryptocurrency space. One of the biggest concerns is how holders of this token will not be able to trade it. That makes it rather worthless on paper, as it is nothing more than a promise by Bitfinex to repay users one day in the future.
BFXCoin is A Wolf In Sheep’s Clothes
Most cryptocurrency users will be well aware by now of how Bitfinex plans to resolve their hacking incident. With nearly 120,000 Bitcoin stolen, the company had no intention of footing the bill themselves for the time being. Instead, they will cut all user balances by 36% in the coming days to recover some of the lost funds.
This concept is creating a lot of bad blood in the cryptocurrency community. Even users who were previously not affected by the hack – although it is difficult to tell who is or isn’t right now – will be penalized for the hacking incident. Then again, some people see this solution is the best option, as it keeps Bitfinex going. If the exchange were to go bankrupt, no one would see their money again.
But Bitfinex will not do so without leaving some IOU on the table. The introduction of BFXCoin will represent a promise by the exchange owners to repay users for taking away their money. Do keep in mind this will only serve as a secondary balance sheet, and will not be a tradeable token or asset by any means.
It is this latter point that has a lot of Bitfinex users riled up right now. If these IOU coins were tradeable, they could gain or lose value over time. However, making these assets tradeable would not serve bitfinex at all, even though they would earn revenue from the trading fees. The BFXCoin is created to keep tabs on how much they own every individual user, and trading these balances will only make things more confusing for them.
There is a secondary reason for not making these assets tradeable as well. On the blog post, Bitfinex mentions how these coins can be exchanged for company shares in IFinex, the overarching entity that runs Bitfinex. If someone was able to obtain the majority of these coins, he or she would gain a significant stake in the business. It is not hard to see why the company would want to avoid that situation.
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