What is BlockSettle?
BlockSettle is a blockchain company which develops integrated key and order management systems. Its focus is centered on developing matching and settlement models for distributed ledger systems where the stakeholder controls the private key.
We believe users should have operational control of their bitcoins and that the purchase and sale of bitcoin can be done without relying on third-party custodians.
What is the BlockSettle Terminal?
The BlockSettle Terminal is a sophisticated key management tool with an integrated order management system.
The BlockSettle Terminal offers:
- Private key control, where the signer can be local, remote, or offline
- Segregated Witness addresses (Bech32), native or nested
- Reduced fees due to mandatory usage of Segregated Witness addresses
- The option to operate your own node infrastructure
Have a question about the BlockSettle Terminal?
Ask the Community. Post your question on the OTC Chat tab in the Terminal and someone from the BlockSettle team or the BlockSettle community will be happy to help you.
What is BlockSettle’s Market Model?
BlockSettle operates a multi-dealer trading network which offers request-for-quote (RFQ) order matching and real-time bilateral settlement.
Price discovery is conducted through an RFQ negotiation process initiated by a participant. The RFQ acts as a non-binding solicitation for a quote and provides the basic terms for a responder to formulate a response to the requesting participant.
Read more at our Market Model
Can I trade digital currencies other than Bitcoin?
BlockSettle’s model is intended to be universally applicable to stakeholder operated accounting ledgers. With that said, we don’t foresee that we will offer trading or wallets for other distributed asset ledgers in the near term.
What currencies and which products can I trade?
BlockSettle will initially offer matching for the following product types:
- Spot FXRFQ between fiat currencies
- Spot XBTRFQ between Bitcoin and a fiat currency
- Private MarketRFQ between Bitcoin and a real-world asset which has been issued as a coloured coin on the blockchain
BlockSettle will initially offer matching in the following currencies:
- EUR, GBP, PLN and CAD
Which currencies can I deposit and withdraw?
Deposits and withdrawals are available in EUR, GBP, PLN, CAD.
Where do I begin?
Please download our Terminal, read the resources, become acquainted with our software and see if you feel comfortable with our model. Should you then wish to have access to our network of participants, you may begin the onboarding process.
How do I Register?
BlockSettle requires users to authenticate themselves through Auth eID, an app available via the IOS App Store and Google Play.
- Download the Auth eID app and go through the Auth eID onboarding process
- Enter your email address which is connected to Auth eID on BlockSettle register page
- Sign the Authentication Request within your app.
What is Auth eID?
Auth eID provides an electronic identification and electronic signature service via its app. BlockSettle relies on Auth eID for identity verification and authenticated login and signing.
Read the getting started with Auth eID guide to learn more about onboarding through Auth eID.
Who can register with BlockSettle?
BlockSettle welcomes both individual persons and legal entities to become participants.
BlockSettle offers two participant types: Trading Participant and Dealing Participant.
Terminal-only users may freely use our software and access our inter-terminal chat services provided they adhere to our License Agreement and Market Data Agreement. Terminal-only users are not obliged to register with BlockSettle.
Trading Participants hold cash position accounts in the BlockSettle system and can access the Spot FX, Spot XBT and Private Market products.
Dealing Participants additionally benefit from providing responsive quotes in the Spot XBT market.
NOTE! BlockSettle is currently unable to offer participant status to any natural person or legal entity considered a US tax subject, or a resident/citizen of a country listed by EU Commission list of High Risk Countries.
Why do I have to provide my personal information to register?
At BlockSettle, we take our legal compliance obligations seriously. Participants are required to undergo an enhanced due diligence process in order to be compliant with Anti-Money Laundering (AML) and Know Your Customer (KYC) regulations.
What are the options to deposit or withdraw?
Deposits are initiated when a participant makes a bank transfer with the payment details listed in the client portal, including the unique deposit reference. Once a deposit with the unique deposit reference is detected, we can easily map the payment to your BlockSettle account.
Only one withdrawal per day is permitted.
Deposits and withdrawals are available in EUR, GBP, PLN and CAD.
What is a Root Private Key?
Our Wallets are Hierarchical Deterministic (HD) wallets. Each wallet has deterministic paths with regards to private market shares, authentication address, and general Bitcoin balances. The Root Private Key (RPK) is the HD wallet root. The RPK can completely restore all wallets from a seed value regardless of how many addresses or paths have been created. Users are encouraged to create paper or digital backups of their RPK in order to facilitate wallet recovery.
What is an authentication address?
The purpose of the authentication address (AA) is as follows:
- It assures BlockSettle that the AA is controlled by the Participant's private key.
- It allows participants to have an independent and on-chain validation that a trade counterpart is indeed a BlockSettle participant.
- It allows for a mutually revocable authentication scheme where the participant, as well as BlockSettle, can control the validity of an AA.
- It allows for the creation of an unlimited amount of settlement addresses which can’t directly be tied to a specific participant by their trade counterpart.
How do I know my Bitcoins are in safe hands?
Your bitcoins are as safe as you keep them.
BlockSettle encourages you to take the necessary precautions to ensure you have backups of your private keys and that you consider the security model around how transactions are signed. In addition, any backups should be securely handled such that no unauthorized person can handle the backup. If your terminal is lost or damaged and you have no backups, BlockSettle will not be able to recover the coins. (By the same token, BlockSettle is unable to confiscate your coins.)
How do I backup my Wallet?
When creating your wallet, you will be given the option of generating a PDF or a digital wallet file, both of which contain your RPK. The PDF will be the default option. You are highly encouraged to print the PDF file or to save the digital backup file to a USB thumb drive or optical media dedicated solely to store the backup. If you download the PDF on the computer, please note that the file is unencrypted and that anyone with access to it can recover your entire wallet. Never keep the PDF or the digital wallet file on a computer as long as is necessary to print the PDF or save the wallet backup file.
If you don’t save a paper backup when creating your wallet, you can find your RPK in the terminal later. Go to: Wallets > Wallet Properties > Backup Wallet > Paper Backup. Keep in mind that private keys should be kept private and secure. Anyone with a copy of your private keys has control of your coins. Our recommendation, is to have at least one paper or digital backup!
Why are paper backups recommended?
A properly stored paper record is readable for hundreds of years. In addition, a paper backup can restore a wallet with approximately sixty seconds worth of typing. A digital backup provides convenience at the cost of possible mechanical failure and future computer interface issues. Both paper and backup options are provided. However, BlockSettle highly recommends that users stick to paper backups.
What security model does BlockSettle employ?
The BlockSettle Terminal manages watching- only (WO) wallets. WO wallets can view the entire history of transactions and balances, generate addresses, and create unsigned transactions. WO wallets can not sign transactions used to actually move coins. The BlockSettle Signer manages the encrypted signing containers which generate private keys, hold private keys, and sign transactions.
The BlockSettle Signer can be run in either headless or GUI mode and be operated locally, remotely, or offline. Headless mode means all operations relating to the Signer are conducted through the Terminal. GUI mode means all operations relating to the Signer are launched and controlled separately in the Signer.
The default settings are for the Signer to be installed alongside the Terminal where the Signer runs in headless mode so that all operations are performed from the Terminal. Advanced users and dealers who wish to auto-quote and auto sign can consider more advanced key management routines.
Does BlockSettle support Hardware Wallets?
The BlockSettle Terminal is compatible with Hardware Wallets; Trezor and Ledger Import your hardware wallet by starting the BlockSettle Terminal, press create wallet and choose to Import Hardware wallet. Make sure that your hardware is plugged into your machine.
Why can’t Trading Participants formulate responsive quotes in the Spot XBT market?
Quotes in the Spot XBT market are non-binding; settlement execution is voluntary. This means that both participants needs to sign their half of the settlement transaction (pay in or pay-out) and broadcast the transaction to the Bitcoin network. To ensure a fair and orderly market, we place demands on dealing participants in terms of capital levels and professional conduct to guarantee that they fulfill their settlement obligations.
For questions relating to Private Market we refer to our Private Market FAQ
What fees do you charge?
You can find all fees in our fee schedule. Note that the fees are separate from the fees required to send a Bitcoin transaction.
What pricing method does BlockSettle use?
BlockSettle implements a fee structure where commissions are garnished from both trading activities as well as for activities which result in an outlay for BlockSettle. Transaction fees vary by product group and are debited from cash settlements.
NOTE! BlockSettle doesn’t interpose itself between bitcoin settlements and cannot charge fees on bitcoin transactions.
What are transaction settlement fees?
All Bitcoin transactions require fees in order to be successfully included in a block. The fees vary based on the current demand from Bitcoin network users.
BlockSettle uses native Segregated Witness (SegWit) addresses for all settlement transactions. Because Segregated Witness usage is mandatory, users save at least 35% in transaction fees compared to wallets that don’t use SegWit.
The transaction fee is determined on a fee-per-byte basis by the terminal. The fee is dynamic and is estimated automatically. The fee will be calculated such that a transaction should be mined within the next two blocks.
A common settlement transaction in the Spot XBT product group contains two transactions: The pay-in and the pay-out. The pay-in transaction typically contains 1 Input and 2 Outputs. The pay-out transaction will typically have 1 Input and 1 Output. The exact byte size of all transactions depends on the address types used.
Do you offer volume incentives?
BlockSettle implements a flat fee structure without rebate schemes.
How does the BlockSettle Terminal connect to the Bitcoin network?
The BlockSettle Terminal connects to a program called ArmoryDB, which acts as a proxy and cache between the Bitcoin blockchain and the BlockSettle Terminal.
BlockSettle runs ArmoryDB on BlockSettle-controlled servers, providing Terminal users with immediate access to the Bitcoin network. Terminal users who wish to have direct access to the Bitcoin network without relying on third-party infrastructure are encouraged to run Bitcoin Core and ArmoryDB on their own infrastructure.
Read the Operate a Node document for guidance on running your own node.
Further information on how to setup your own proxy can be found here:
What is SegWit and why does BlockSettle use it?
Segregated Witness, or SegWit, is a Bitcoin network enhancement. Among other things, SegWit is an architectural change that removes the requirement for embedding the “unlocking script” with each input. The change makes the network more efficient, with SegWit-enabled transactions receiving a significant Bitcoin network fee discount.
In addition, before SegWit, it was not possible to have the buyer of XBT create a signed payout transaction prior to pay-in actually occurring. With SegWit, BlockSettle is now able to show the counterparty which specific UTXO is intended for sale without having to sign the UTXO in preparation for transaction propagation. UTXO buyers can create and deliver the payout transaction to the trade counterpart prior to the trade occurring.