It can be dangerous to discuss Binary Options. On the surface it looks quite promising. Trading Binary Options just means betting on the price of a currency pair to go up or down after a certain amount of time. For example, you can bet $200 that the price of EUR/USD will be below 1.2550 in 15 minutes. If that happens you win around 75%, or $150. If, however the trade expires above 1.2550 I lose the $200. This simple form of ‘trading’ has attracted many investors to the industry. This is because, with only a few hundred dollars you could make thousands every month. However, the reality is much more sinister and unforgiving.
All these Binary Options trades are facilitated by brokers. These brokers are on centralized platforms run by managers and salespeople that employ various — borderline-illegal — tactics to trick people into losing their money. The major issues are that many brokers simply do not pay out your winnings, they manipulate the price of the assets, or they team up with marketers who pretend they’re independent objective reviewers and entice you to sign up and give it a go. This is all possible because of the poorly regulated nature of the industry. In this article we explore in depth how traditional Binary Options brokers are fundamentally flawed and constitute a major conflict of interest, and how blockchain technology and decentralization can bring about much more secure and honest systems.
Show Me the Money
As stated above, the biggest issue with Binary Options brokers is that they simply do not pay out your money when you start winning too much. Countless reports can be found in online forums about pretty much every existing broker. The problem is that these brokers only make money if you lose money or keep it on their account. When you deposit cash with a broker, you are sending money to their bank account. You’re given an account on the platform that mirrors how much you’ve deposited. This way they make money off interest rates by their bank. In addition, they make money if you lose money, because that way that cash is reinvested back into the system and does not escape their accounts. So naturally, if you want to cash out a big win they would have an incentive to block you. Here is an example of someone who won a bit too much, and was forced out of their account:
Email #1: The person was on a winning streak for several weeks racking up a big profit. After this person tried cashing out they were served with this letter. / Crypto Calavera
Here is another example from a different broker:
Email #2: Broker seizing traders funds. / Crypto Calavera
This person was fortunate enough to at least get their final winnings from the broker. However, just closing the account without any explanation or reasoning is a bit less than fair. This just further proves that there is no point in any long-term expectations from Binary Options brokers. If you win too much you WILL be shut down.
I’m Not a Puppet I Promise!
Another crucial downfall of this system is the plethora of marketers eager to sell these brokers to people as if they were independent third-party reviewers. They pretend to be objective and unbiased, when they have been paid out by the brokers themselves to give out “honest reviews” that end up advertising the platform to unsuspecting traders.
Nowhere do they mention that they’d close your account if you win too much…
An example can be given by the “Binary Options Watchdog” website. As you can see, they do an immensely favorable review of Stockpair — the broker in the first example. Nowhere do they mention that they’d close your account if you win too much. They even state: “Stockpair over the years have shown that they are reputable and one of the brokers that are continuously finding unique ways to assist the clients and having other options for trading like pair options.” If ‘continuously finding unique ways to assist the clients’ means banning them after they’ve won money, sure, they definitely do that.
Another example can be seen from the site literally called “Scam Broker”. This is for the broker from the second example. Again, no mention at all that accounts get closed without any explanation or reasoning. In addition, the entire site is filled with pop-up ads and banner ads for more scam like brokers ready to take people’s money. Since the space is so unregulated these marketers and the brokers rarely get punished. There are little, if any, protections for the consumer, and conflicts of interest go unscrutinized.
IQOption manipulating the price of the coins for some bigger gains/ Binary Options Edge
Finally, a major issue is the manipulation of the price by many leading brokers in times of low volatility. A quick five-minute Google search reveals forums full of people catching ‘reputable’ brokers manipulating the price. As you can see, even IQOption — one of the market leaders in the industry, is guilty of manipulating the price of their assets. If such a massive company with millions of dollars passing through it every day, can allow itself such unethical behavior then there is a serious problem in the space. Binary options in their current state have been around for over 10 years. And yet little has been done from regulators to protect consumers against these activities that quite frankly should be illegal. If the regulators will not step in, then we, the people must do something about it. This is where blockchain technology comes into play.
Spectre AI — The Future of Binary Options Trading
I want to preface this by saying that I am NOT in any way shape or form paid by Spectre AI for this article. I have followed their progress closely since they had their ICO in 2017 and I am impressed by their amazing progress. I was inspired to write this piece after I saw the amazing potential their system has in mitigating the major issues that Binary Options brokers have across the field. I’ve traded Binary Options with traditional brokers for years and I believe Spectre has the solution to all the problems I’ve witnessed and have been victim of in my experience.
What Is Spectre?
Spectre Logo / Spectre
Spectre AI is a broker-less automated binary options trading platform. It lets you trade binary options with cryptocurrency and Ethereum as well. It is fully governed by smart contracts technology. Its money pool is transparent and clearly visible in the top centre of the screen. Every trader knows exactly how much money the platform has at any given time. By design there is no possible way for anyone to tamper with the platform in any way to manipulate the price or stop you from withdrawing your funds.
The way it works is simply brilliant. You can either have an onsite wallet that puts your funds in an escrow account until you decide to withdraw to your private wallet. This is good for smaller accounts because it lets the price of gas per transaction fall on the system instead of on your personal account. After you’ve decided you want to withdraw, the transaction happens within minutes to your private Ethereum wallet and the funds are almost immediately yours. No-one can stop the withdrawal process. No-one is charged with “approving” or “rejecting” withdrawals. The funds are yours.
Alternatively, if you have a bit of a larger trading pot, you can opt in for the completely decentralized wallet. With this one every single winning trade goes straight into your private Ethereum wallet. The downside is that you take on the gas price for it. But if you’re trading with hundreds or thousands per trade that is negligible. This way there is no need even for an escrow account and for you to push a button to withdraw. It automatically goes directly to a wallet that you hold the private keys to. This part of the system in my humble opinion is revolutionary for the Binary Options industry and I would not be surprised if Spectre AI was an industry leader within 3 years because of this.
If you are a trader and like the platform you can decide to buy SXUT tokens to enhance your trading experience. These give you benefits like instant chat support, enhanced % payouts per trade, and more exotic trading pairs. No blockchain technology is complete without tokens with utility, and SXUT is the one for Spectre.
A Piece of the Pie
Say you are not that good of a trader but see the potential of the Binary Options industry. You think it will grow exponentially in the next 10 years and want to be in on it somehow. With Spectre, you can get a piece of the profits the platform makes by being an SXDT token holder. With these tokens you are entitled to a part of the volume profits every month! Depending on how many tokens you hold, this can be a generous monthly salary. This, in addition to the fact that the SXDT tokens will grow in value if the platform performs well, are amazing incentives to hold them.
No Conflict of Interests
With the Spectre AI model, there is no central authority that benefits from funds being kept in a financial institution earning them interest. They truly only make money through volume; losses are not important to the platform. What is important is greater volume, so that more fees can be collected. This removes the conflict of interest of the platform to want to have you lose money for them to win. In addition, every person that wins a trade will be matched, whenever possible, with a person losing a trade. This makes it significantly harder for the smart contract’s ETH to be drained, further strengthening the liquidity pool.
In summary, Spectre AI is one of the first teams I’ve seen that has utilized the decentralized trustless nature of blockchain technology and has created a working product adding immense value to a corrupt industry. The platform is still young, in Beta, and continuously tested and improved. It will be a good few months before a real functioning product can be ready for a wider audience. However, when that happens, and marketing efforts go into full effect, I expect that Spectre AI will see unprecedented growth and take up the majority of the global Binary Options market share within 5 years.
Video explaining how Spectre works / Spectre YouTube
Finally, there is a real-world use case for blockchain technology in a specific industry outside of storing value, or raising capital. It’s just a matter of time before this platform is discovered by the wider Binary Options trading community. Spectre is doing and will do great things.
If you enjoyed this review, and have opinions of your own about Spectre AI, please leave them in the comments below! Also, if you’d like to see more of this type of content, let us know, we’ll keep writing this way 😉
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