<p>From <a href="https://en.bitcoin.it/wiki/Bitcoinica" rel="nofollow noreferrer">the Bitcoin wiki</a>:</p>

<blockquote>
  <p>An exchange that enables leveraged speculation in its
  contract-for-difference (CFD) market against the Bitcoin to USD
  (BTC/USD) exchange rate.</p>
  
  <p>The service charges no trading fees but instead earns from the trading
  spread -- similar to how forex trading functions.</p>
</blockquote>

<p>This was a powerful (and risky) service to provide to traders as leveraging allowed them to invest in more bitcoins than what they owned, and the contract-for-difference market allowed traders to take a position (gamble?) on exchange rate movements.</p>

<p>There appeared to be a strong appetite for such a service, because it grew in popularity very quickly - it was <a href="https://bitcointalk.org/index.php?topic=42267" rel="nofollow noreferrer">first mentioned on bitcointalk.org in Sep 2011</a> and by March 2012 was large enough to be holding BTC43,000 (<a href="https://bitcoin.stackexchange.com/q/3642/516">when it was first hacked</a>).</p>

CC BY-SA 3.0
2012-05-23T03:29:40.480Z
2012-06-01T10:49:46.663Z
2017-04-13T12:47:34.187Z
Highly Irregular
<p>What sort of service is <a href="https://www.bitcoinica.com/" rel="nofollow">Bitcoinica</a> (or was before it was closed)?</p>

<websites><services><bitcoinica>
What sort of service is Bitcoinica?
ThePiachu
# What sort of service is Bitcoinica?

(Asked by: username_0 on 2012-05-23)

What sort of service is [Bitcoinica](https://www.bitcoinica.com/) (or was before it was closed)?

**Tags:** websites, services, bitcoinica


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## 1 answers

### Answer by username_1 on 2012-05-23. Score: 3 | Accepted answer

From [the Bitcoin wiki](https://en.bitcoin.it/wiki/Bitcoinica):

> An exchange that enables leveraged speculation in its
> contract-for-difference (CFD) market against the Bitcoin to USD
> (BTC/USD) exchange rate.
>
> The service charges no trading fees but instead earns from the trading
> spread -- similar to how forex trading functions.

This was a powerful (and risky) service to provide to traders as leveraging allowed them to invest in more bitcoins than what they owned, and the contract-for-difference market allowed traders to take a position (gamble?) on exchange rate movements.

There appeared to be a strong appetite for such a service, because it grew in popularity very quickly - it was [first mentioned on bitcointalk.org in Sep 2011](https://bitcointalk.org/index.php?topic=42267) and by March 2012 was large enough to be holding BTC43,000 ([when it was first hacked](https://bitcoin.stackexchange.com/q/3642/516)).


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