TradeHill Exchange Launches
TradeHill launches as the first major US-based competitor to Mt. Gox, offering features like direct vendor payments.
On June 8, 2011, Jered Kenna launched TradeHill, the first significant competitor to Mt. Gox based in the United States. Recognizing the risks of Mt. Gox's monopoly (which handled nearly all volume at the time), TradeHill pitched itself as a more professional, secure, and feature-rich alternative. It introduced innovations such as 'instant' trading and direct payments to vendors, attempting to create a more closed-loop economy. The exchange quickly gained traction, at one point handling over 20% of global Bitcoin trading volume, providing a critical redundancy in the market structure.
TradeHill's launch was critical for decentralizing the exchange ecosystem, which was dangerously concentrated in Japan. It provided US users with domestic banking options, reducing the friction of international wires. However, TradeHill faced immense banking and regulatory challenges. In 2012, disputes with payment processors (specifically Dwolla) and regulatory uncertainty would force it to suspend operations. Jered Kenna, the CEO, would later become a prominent figure in the space, known for both his early advocacy and subsequent massive losses in later hacks.
TradeHill represents the first wave of 'professional' exchanges attempting to legitimize the industry. Its rise and fall illustrated the extreme difficulty of operating a crypto business within the US regulatory framework of 2011, serving as a cautionary tale for the exchanges that followed. It showed that building the software was easy, but maintaining the banking relationships was nearly impossible.
Key Sources: Bitcoin Wiki: TradeHill | TechCrunch: TradeHill Profile