If you have been trading on a cryptocurrency exchange, you might have noticed how these platforms work. Buyers and sellers come together to exchange their favourite coins, in hopes of making a profit. The total volume of those transactions determines the popularity of an exchange, as well as the liquidity of cryptocurrencies.
For the longest time, the public used reported daily volumes of exchanges to determine the quality of an exchange and, as an extension of that, the best option to exchange cryptos quickly.
However, one strange thing started to happen as cryptocurrencies became more popular. The exchanges with the highest volumes were relatively unheard of and, in some cases, completely unknown.
This confused many market participants. How can an exchange with only 2000 Facebook fans and a quiet Telegram group have 3x more volume than Bitfinex?
And how can those same exchanges not create any liquidity for new coins, even though they report such massive numbers?
Long and behold, Bitwise launched an investigation to explore the causes of this issue. A short while later, in a 104-pager, they shared their findings with the world.
According to the research performed, many cryptocurrency exchanges were artificially inflating their reported volumes. In fact, the numbers were so highly inflated that it is assumed that about 95% of the total volume is actually non-existent.
Why does this happen? Well, according to the same paper, it happens in order to increase the exchanges’ market position and make more profit on new coin listings. This, of course, makes it hard for new market participants to trust exchanges.
The logical thing to do then, is find platforms that you can actually trust. Exchanges that report real volumes, coherent with the activity of their users.
Paybis has created a helpful infographic to help you understand which platforms you can actually trust. Check the following infographic to better understand the findings of Bitwise.
As you may have imagined, the news was unpleasant for most crypto-enthusiasts. In fact, the community demanded answers from CoinMarketCap. The company that got recently acquired by Binance tackled this issue by introducing a Liquidity metric. Based on this, users are better able to distinguish between honest and “scammy” exchange platforms.
After its acquisition by Binance, the Reported Volumes metric also got a pleasant refresh. Volumes now look a lot more realistic and in line with the actual volumes being made on a daily basis.
Cryptocurrencies, as a market, are still in their infancy. Thankfully, as the space keeps improving, so do the metrics of data collection. As such, it is expected the following year will completely eliminate irrelevant platforms that offer now value to the space.
Moreover, many new FIAT on-ramps for different countries are appearing on the market. We expect that this effort will continue and, eventually, increase the standard of requirements for the proper operation of exchange platforms.
By all means, the cryptocurrency space looks massively different than what it did two years ago. And with companies like Bitwise analyzing the market and helping its growth, we are more than confident about the next 2-5 years.
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The second half of 2019 was really difficult for Bitcoin. According to independent experts, the total volume of public digital assets has decreased by more than 50% – from $388 billion to $166 billion. However, there is other evidence. Yes, the cryptocurrency market really fell to the bottom if you look at these statistics, but let’s not forget that market conditions are dynamic. And the factor that means failure today may well mean success tomorrow.
There were periods of stabilization of the exchange rate, but for a long time cryptocurrency lost much in price. At one time, panic even started on the market, and Bitcoin was predicted to soon fall to zero. Against this background, the results of the year sounded quite unexpectedly: cryptocurrency turned out to be the most profitable investment. The coin rate rose from $4035 to $ 7344, providing investment growth by 82%.
This year will be great for Bitcoin, Wall Street analyst and Fundstrat founder Tom Lee suggested. The destabilization of relations between Iran and the United States is one of the reasons.
Plus, modern realities make it possible to add a supposedly modern coronavirus epidemic to these factors. However, at the moment there is no consensus among experts on how the coronavirus will affect the Bitcoin exchange rate. It is still unclear whether we are dealing with a real threat to people’s lives or is this another hype, a political company, or an attempt to distract investors from other, more important issues.
However, even those experts who believe that the disease can affect the main digital coin explain that this will happen only if the outbreak develops into a full-fledged epidemic.
Venture capitalist Tim Draper is also confident in the long-term growth in Bitcoin value. In an interview with FOX Business, he advised millennials to invest in cryptocurrencies, as they are on the verge of a new financial revolution. However, the explosion of the financial revolution will slow down due to the influence of the values of older generations and the obsolescence of the current banking system.
Bitcoin exchange rates are very unstable. Cryptocurrencies have already shown that it can rapidly fall and take off at a breakneck pace. Due to this state of affairs, bitcoin does not inspire confidence among many investors who would be happy to invest big money in the development of the blockchain, but fear for their savings. In 2020, we are unlikely to have to observe the strong influence of this factor, but we should not forget about it.
About the author: Gregory is passionate about researching new technologies in both mobile, web and WordPress. Also, he works on Best Writers Online the best writing services reviews. Gregory in love with stories and facts, so Gregory always tries to get the best of both worlds.
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For those interested in digital currencies, It has changed the way we do business and the way investors invest in a company. Employers are offering crypto as pay and others, such as music artists, are accepting them in exchange for singles. The attention crypto has attracted made it popular among many. One the biggest reason why many are attracted to crypto is that many of them sit on a decentralised network. This means an organisation or a government does not control them, unlike Fiat currency. Ther is also no physical form of cryptocurrency, but it can be converted into the more familiar notes and coins we know and love.
The introduction of Bitcoin brought with it new technology such a blockchain. The nature of blockchain makes it a secure way of working, and we will go into more detail about it below. It is essential to mention, however, that not all countries share standard consensus o what crypto is. Some view Bitcoin as exchange tokens. Others view crypto in the same light as hard cash. These anomalies in the crypto world mean taxes for Bitcoin differ from country to country which why before investing, purchasing or dealing with crypto, it would be wise to find out the countries views on it.
A big part of making an investment in Bitcoin and other cryptocurrencies and being successful at it means learning the lingo. Here are some of the underlying crypto trading terms that are commonly used. Knowing these terms will help you navigate your way through the world of crypto in ease.
Blockchain is a decentralised and distributed public ledger which means it is a database that is validated by a vast community of people rather than a central authority. In most cases, blockchain refers to the bitcoin blockchain, which is made up of blocks. It allows data to be stored globally on thousands of servers and lets individuals enter the networks to see all the entries in real-time. By doing this, it makes it hard for users to gain control of the system. The immense reach of blockchain makes it harder to hack as all transactions are transparent for all to see. Falsifying a single record in the chain means you would need to forge the entire chain. Bitcoin transactions sit on a blockchain.
A wallet is a secure digital wallet that is used to store, send and receive digital currency like bitcoin. It is typically a string of numbers and letters. Many official coins like bitcoin have official wallets, but you can find wallets which hold different types of currencies in one place.
To use a crypto wallet users will usually be given an ID as a way to identify the wallet along with its own private key which will help to authenticate and prove possession of the wallet by the person who owns it.
To carry out a transaction with digital currency, you will need two things. The first is a wallet which acts as your address and a private key. The private key is a string of random numbers, but unlike address, the private key must be kept secret. The private key gives users authority to digitally sign and authorise different actions that are done by the digital identity when used with the public key.
The main priority when dealing with cryptocurrencies is to keep the private key secure. It the key gets lost or stolen; there is no means to recover it.
The order book displays current prices with volumes in real-time of current order from buyers and sellers.
The price at which a person is trying to sell an asset is known as the Bid Price.
The ask price is the price individuals are trying to buy an asset for.
A period during which asset prices consistently keep rising is known as a Bull Market. To get the most out of investments, users are likely to enter the market at the beginning or just before the start of a Bull market. This is so the assets they buy become more valuable.
In the flip side to the Bull market, a bear market is a period during which the prices of assets consistently fall. The silver lining to this si that the drop in prices means that entering the market becomes cheaper, and it becomes possible to buy the same amount of assets for a lower price. Generally, Bear markets are not specific to cryptocurrencies, and any tradeable asset can go through the same life cycle.
Spread is referred to as the price difference between the buy price and the sell price of an asset. The exchange between the individuals defines them.
When an individual wants to purchase an asset at a designated price, buy order or bids are created. When an individual wants to sell an asset at a selected amount, sell orders, or asks are created.
In a 24-hour trading cycle, high means the peak price Bitcoin or other assets have reached in 24 hours. And so low means the lowest price the particular assets has become in the 24-hour trading cycle.
The difference between the price a trader expects and the trade to execute at, and the price it eventually executes at known as Slippage.
The official completion of a trading process is known as Execution.
Storing digital money in an offline wallet is known as cold storage and usually stored on a platform that has no connection to the internet. There are many Blockchain smartphones which now have cold storage capabilities.
Satoshi, named after the creator of Bitcoin, is the smallest unit of Bitcoin (BTC) recorded on the blockchain.
The act of a transaction which is included in a single block within the Bitcoin blockchain is known as confirmation.
Like a fingerprint, a digital signature is an e-signature which is created by using the Publick Key Cryptography (PKC). The digital signature associates securely, a signatory with a document in a recorded transaction. Every transaction has a different digital signature that depends on the users private key.
Each Bitcoin transaction incurs a fee. It is processed by a miner who is paid for their services, and the Bitcoin network confirms the results.
Author: Yasmita Kumar
A little bit about me: I am a writer and have been writing about various topics over many years now. I enjoy writing about my hobbies which include technology and its impact on our everyday life. Professionally I write about Technology, Health and Fashion and previously worked for the NHS.
Open your free digital wallet here to store your cryptocurrencies in a safe place.
How to buy bitcoin with bank accounts? Read this step-by-step guide to convert your fiat currencies into your favorite digital currency.
We recently opened a new service called HolyTransaction where you can buy and sell bitcoins.
This is an important feature when you need to buy or sell bitcoin immediately. You just need to create an account on HolyTransaction.
You just need to visit HolyTransaction and follow the process you can read below.
This guide will enable you to buy bitcoin with bank account.
5. Insert the amount that you want to transfer for your purchase and then click “Next”
6. Wait for the validation of your order. This process of verification will one or two minutes.
6. Then you will need to pay the amount of EUR you decided, so you need to order the bank transfer from your bank account. You will see the IBAN where you need to send the fiat currency to and you must include the reference.
7. Then you will see a countdown that starts from 48h. At the end of that, the operation will be completed. You will see a similar image as shown below:
NOTE: the max amount you need to buy daily is 4500 EUR. Bank transfer needs 48h to be received.
Open your account on HolyTransaction here
Open your free digital wallet here to store your cryptocurrencies in a safe place.