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Syscoin Platform’s Great Reddit Scaling Bake-off Proposal

Syscoin Platform’s Great Reddit Scaling Bake-off Proposal

https://preview.redd.it/rqt2dldyg8e51.jpg?width=1044&format=pjpg&auto=webp&s=777ae9d4fbbb54c3540682b72700fc4ba3de0a44
We are excited to participate and present Syscoin Platform's ideal characteristics and capabilities towards a well-rounded Reddit Community Points solution!
Our scaling solution for Reddit Community Points involves 2-way peg interoperability with Ethereum. This will provide a scalable token layer built specifically for speed and high volumes of simple value transfers at a very low cost, while providing sovereign ownership and onchain finality.
Token transfers scale by taking advantage of a globally sorting mempool that provides for probabilistically secure assumptions of “as good as settled”. The opportunity here for token receivers is to have an app-layer interactivity on the speed/security tradeoff (99.9999% assurance within 10 seconds). We call this Z-DAG, and it achieves high-throughput across a mesh network topology presently composed of about 2,000 geographically dispersed full-nodes. Similar to Bitcoin, however, these nodes are incentivized to run full-nodes for the benefit of network security, through a bonded validator scheme. These nodes do not participate in the consensus of transactions or block validation any differently than other nodes and therefore do not degrade the security model of Bitcoin’s validate first then trust, across every node. Each token transfer settles on-chain. The protocol follows Bitcoin core policies so it has adequate code coverage and protocol hardening to be qualified as production quality software. It shares a significant portion of Bitcoin’s own hashpower through merged-mining.
This platform as a whole can serve token microtransactions, larger settlements, and store-of-value in an ideal fashion, providing probabilistic scalability whilst remaining decentralized according to Bitcoin design. It is accessible to ERC-20 via a permissionless and trust-minimized bridge that works in both directions. The bridge and token platform are currently available on the Syscoin mainnet. This has been gaining recent attention for use by loyalty point programs and stablecoins such as Binance USD.

Solutions

Syscoin Foundation identified a few paths for Reddit to leverage this infrastructure, each with trade-offs. The first provides the most cost-savings and scaling benefits at some sacrifice of token autonomy. The second offers more preservation of autonomy with a more narrow scope of cost savings than the first option, but savings even so. The third introduces more complexity than the previous two yet provides the most overall benefits. We consider the third as most viable as it enables Reddit to benefit even while retaining existing smart contract functionality. We will focus on the third option, and include the first two for good measure.
  1. Distribution, burns and user-to-user transfers of Reddit Points are entirely carried out on the Syscoin network. This full-on approach to utilizing the Syscoin network provides the most scalability and transaction cost benefits of these scenarios. The tradeoff here is distribution and subscription handling likely migrating away from smart contracts into the application layer.
  2. The Reddit Community Points ecosystem can continue to use existing smart contracts as they are used today on the Ethereum mainchain. Users migrate a portion of their tokens to Syscoin, the scaling network, to gain much lower fees, scalability, and a proven base layer, without sacrificing sovereign ownership. They would use Syscoin for user-to-user transfers. Tips redeemable in ten seconds or less, a high-throughput relay network, and onchain settlement at a block target of 60 seconds.
  3. Integration between Matic Network and Syscoin Platform - similar to Syscoin’s current integration with Ethereum - will provide Reddit Community Points with EVM scalability (including the Memberships ERC777 operator) on the Matic side, and performant simple value transfers, robust decentralized security, and sovereign store-of-value on the Syscoin side. It’s “the best of both worlds”. The trade-off is more complex interoperability.

Syscoin + Matic Integration

Matic and Blockchain Foundry Inc, the public company formed by the founders of Syscoin, recently entered a partnership for joint research and business development initiatives. This is ideal for all parties as Matic Network and Syscoin Platform provide complementary utility. Syscoin offers characteristics for sovereign ownership and security based on Bitcoin’s time-tested model, and shares a significant portion of Bitcoin’s own hashpower. Syscoin’s focus is on secure and scalable simple value transfers, trust-minimized interoperability, and opt-in regulatory compliance for tokenized assets rather than scalability for smart contract execution. On the other hand, Matic Network can provide scalable EVM for smart contract execution. Reddit Community Points can benefit from both.
Syscoin + Matic integration is actively being explored by both teams, as it is helpful to Reddit, Ethereum, and the industry as a whole.

Proving Performance & Cost Savings

Our POC focuses on 100,000 on-chain settlements of token transfers on the Syscoin Core blockchain. Transfers and burns perform equally with Syscoin. For POCs related to smart contracts (subscriptions, etc), refer to the Matic Network proposal.
On-chain settlement of 100k transactions was accomplished within roughly twelve minutes, well-exceeding Reddit’s expectation of five days. This was performed using six full-nodes operating on compute-optimized AWS c4.2xlarge instances which were geographically distributed (Virginia, London, Sao Paulo Brazil, Oregon, Singapore, Germany). A higher quantity of settlements could be reached within the same time-frame with more broadcasting nodes involved, or using hosts with more resources for faster execution of the process.
Addresses used: 100,014
The demonstration was executed using this tool. The results can be seen in the following blocks:
612722: https://sys1.bcfn.ca/block/6d47796d043bb4c508d29123e6ae81b051f5e0aaef849f253c8f3a6942a022ce
612723: https://sys1.bcfn.ca/block/8e2077f743461b90f80b4bef502f564933a8e04de97972901f3d65cfadcf1faf
612724: https://sys1.bcfn.ca/block/205436d25b1b499fce44c29567c5c807beaca915b83cc9f3c35b0d76dbb11f6e
612725: https://sys1.bcfn.ca/block/776d1b1a0f90f655a6bbdf559ff5072459cbdc5682d7615ff4b78c00babdc237
612726: https://sys1.bcfn.ca/block/de4df0994253742a1ac8ac9eec8d2a8c8b0a6d72c53d6f3caa29bb6c171b0a6b
612727: https://sys1.bcfn.ca/block/e5e167c52a9decb313fbaadf49a5e34cb490f8084f642a850385476d4ef10d70
612728: https://sys1.bcfn.ca/block/ab64d989edc71890e7b5b8491c20e9a27520dc45a5f7c776d3dae79057f59fe7
612729: https://sys1.bcfn.ca/block/5e8b7ecd0e36f99d07e4ea6e135fc952bf7ec30164ab6f4d1e98b0f2d405df6d
612730: https://sys1.bcfn.ca/block/d395df3d31dde60bbb0bece6bd5b358297da878f0beb96be389e5f0e043580a3
It is important to note that this POC is not focused on Z-DAG. The performance of Z-DAG has been benchmarked within realistic network conditions: Whiteblock’s audit is publicly available. Network latency tests showed an average TPS around 15k with burst capacity up to 61k. Zero-latency control group exhibited ~150k TPS. Mainnet testing of the Z-DAG network is achievable and will require further coordination and additional resources.
Even further optimizations are expected in the upcoming Syscoin Core release which will implement a UTXO model for our token layer bringing further efficiency as well as open the door to additional scaling technology currently under research by our team and academic partners. At present our token layer is account-based, similar to Ethereum. Opt-in compliance structures will also be introduced soon which will offer some positive performance characteristics as well. It makes the most sense to implement these optimizations before performing another benchmark for Z-DAG, especially on the mainnet considering the resources required to stress-test this network.

Cost Savings

Total cost for these 100k transactions: $0.63 USD
See the live fee comparison for savings estimation between transactions on Ethereum and Syscoin. Below is a snapshot at time of writing:
ETH price: $318.55 ETH gas price: 55.00 Gwei ($0.37)
Syscoin price: $0.11
Snapshot of live fee comparison chart
Z-DAG provides a more efficient fee-market. A typical Z-DAG transaction costs 0.0000582 SYS. Tokens can be safely redeemed/re-spent within seconds or allowed to settle on-chain beforehand. The costs should remain about this low for microtransactions.
Syscoin will achieve further reduction of fees and even greater scalability with offchain payment channels for assets, with Z-DAG as a resilience fallback. New payment channel technology is one of the topics under research by the Syscoin development team with our academic partners at TU Delft. In line with the calculation in the Lightning Networks white paper, payment channels using assets with Syscoin Core will bring theoretical capacity for each person on Earth (7.8 billion) to have five on-chain transactions per year, per person, without requiring anyone to enter a fee market (aka “wait for a block”). This exceeds the minimum LN expectation of two transactions per person, per year; one to exist on-chain and one to settle aggregated value.

Tools, Infrastructure & Documentation

Syscoin Bridge

Mainnet Demonstration of Syscoin Bridge with the Basic Attention Token ERC-20
A two-way blockchain interoperability system that uses Simple Payment Verification to enable:
  • Any Standard ERC-20 token to be moved from Ethereum to the Syscoin blockchain as a Syscoin Platform Token (SPT), and back to Ethereum
  • Any SPT to be moved from Syscoin to the Ethereum blockchain as an ERC-20 token, and back to Syscoin

Benefits

  • Permissionless
  • No counterparties involved
  • No trading mechanisms involved
  • No third-party liquidity providers required
  • Cross-chain Fractional Supply - 2-way peg - Token supply maintained globally
  • ERC-20s gain vastly improved transactionality with the Syscoin Token Platform, along with the security of bitcoin-core-compliant PoW.
  • SPTs gain access to all the tooling, applications and capabilities of Ethereum for ERC-20, including smart contracts.
https://preview.redd.it/l8t2m8ldh8e51.png?width=1180&format=png&auto=webp&s=b0a955a0181746dc79aff718bd0bf607d3c3aa23
https://preview.redd.it/26htnxzfh8e51.png?width=1180&format=png&auto=webp&s=d0383d3c2ee836c9f60b57eca35542e9545f741d

Source code

https://github.com/syscoin/?q=sysethereum
Main Subprojects

API

Tools to simplify using Syscoin Bridge as a service with dapps and wallets will be released some time after implementation of Syscoin Core 4.2. These will be based upon the same processes which are automated in the current live Sysethereum Dapp that is functioning with the Syscoin mainnet.

Documentation

Syscoin Bridge & How it Works (description and process flow)
Superblock Validation Battles
HOWTO: Provision the Bridge for your ERC-20
HOWTO: Setup an Agent
Developer & User Diligence

Trade-off

The Syscoin Ethereum Bridge is secured by Agent nodes participating in a decentralized and incentivized model that involves roles of Superblock challengers and submitters. This model is open to participation. The benefits here are trust-minimization, permissionless-ness, and potentially less legal/regulatory red-tape than interop mechanisms that involve liquidity providers and/or trading mechanisms.
The trade-off is that due to the decentralized nature there are cross-chain settlement times of one hour to cross from Ethereum to Syscoin, and three hours to cross from Syscoin to Ethereum. We are exploring ways to reduce this time while maintaining decentralization via zkp. Even so, an “instant bridge” experience could be provided by means of a third-party liquidity mechanism. That option exists but is not required for bridge functionality today. Typically bridges are used with batch value, not with high frequencies of smaller values, and generally it is advantageous to keep some value on both chains for maximum availability of utility. Even so, the cross-chain settlement time is good to mention here.

Cost

Ethereum -> Syscoin: Matic or Ethereum transaction fee for bridge contract interaction, negligible Syscoin transaction fee for minting tokens
Syscoin -> Ethereum: Negligible Syscoin transaction fee for burning tokens, 0.01% transaction fee paid to Bridge Agent in the form of the ERC-20, Matic or Ethereum transaction fee for contract interaction.

Z-DAG

Zero-Confirmation Directed Acyclic Graph is an instant settlement protocol that is used as a complementary system to proof-of-work (PoW) in the confirmation of Syscoin service transactions. In essence, a Z-DAG is simply a directed acyclic graph (DAG) where validating nodes verify the sequential ordering of transactions that are received in their memory pools. Z-DAG is used by the validating nodes across the network to ensure that there is absolute consensus on the ordering of transactions and no balances are overflowed (no double-spends).

Benefits

  • Unique fee-market that is more efficient for microtransaction redemption and settlement
  • Uses decentralized means to enable tokens with value transfer scalability that is comparable or exceeds that of credit card networks
  • Provides high throughput and secure fulfillment even if blocks are full
  • Probabilistic and interactive
  • 99.9999% security assurance within 10 seconds
  • Can serve payment channels as a resilience fallback that is faster and lower-cost than falling-back directly to a blockchain
  • Each Z-DAG transaction also settles onchain through Syscoin Core at 60-second block target using SHA-256 Proof of Work consensus
https://preview.redd.it/pgbx84jih8e51.png?width=1614&format=png&auto=webp&s=5f631d42a33dc698365eb8dd184b6d442def6640

Source code

https://github.com/syscoin/syscoin

API

Syscoin-js provides tooling for all Syscoin Core RPCs including interactivity with Z-DAG.

Documentation

Z-DAG White Paper
Useful read: An in-depth Z-DAG discussion between Syscoin Core developer Jag Sidhu and Brave Software Research Engineer Gonçalo Pestana

Trade-off

Z-DAG enables the ideal speed/security tradeoff to be determined per use-case in the application layer. It minimizes the sacrifice required to accept and redeem fast transfers/payments while providing more-than-ample security for microtransactions. This is supported on the premise that a Reddit user receiving points does need security yet generally doesn’t want nor need to wait for the same level of security as a nation-state settling an international trade debt. In any case, each Z-DAG transaction settles onchain at a block target of 60 seconds.

Syscoin Specs

Syscoin 3.0 White Paper
(4.0 white paper is pending. For improved scalability and less blockchain bloat, some features of v3 no longer exist in current v4: Specifically Marketplace Offers, Aliases, Escrow, Certificates, Pruning, Encrypted Messaging)
  • 16MB block bandwidth per minute assuming segwit witness carrying transactions, and transactions ~200 bytes on average
  • SHA256 merge mined with Bitcoin
  • UTXO asset layer, with base Syscoin layer sharing identical security policies as Bitcoin Core
  • Z-DAG on asset layer, bridge to Ethereum on asset layer
  • On-chain scaling with prospect of enabling enterprise grade reliable trustless payment processing with on/offchain hybrid solution
  • Focus only on Simple Value Transfers. MVP of blockchain consensus footprint is balances and ownership of them. Everything else can reduce data availability in exchange for scale (Ethereum 2.0 model). We leave that to other designs, we focus on transfers.
  • Future integrations of MAST/Taproot to get more complex value transfers without trading off trustlessness or decentralization.
  • Zero-knowledge Proofs are a cryptographic new frontier. We are dabbling here to generalize the concept of bridging and also verify the state of a chain efficiently. We also apply it in our Digital Identity projects at Blockchain Foundry (a publicly traded company which develops Syscoin softwares for clients). We are also looking to integrate privacy preserving payment channels for off-chain payments through zkSNARK hub & spoke design which does not suffer from the HTLC attack vectors evident on LN. Much of the issues plaguing Lightning Network can be resolved using a zkSNARK design whilst also providing the ability to do a multi-asset payment channel system. Currently we found a showstopper attack (American Call Option) on LN if we were to use multiple-assets. This would not exist in a system such as this.

Wallets

Web3 and mobile wallets are under active development by Blockchain Foundry Inc as WebAssembly applications and expected for release not long after mainnet deployment of Syscoin Core 4.2. Both of these will be multi-coin wallets that support Syscoin, SPTs, Ethereum, and ERC-20 tokens. The Web3 wallet will provide functionality similar to Metamask.
Syscoin Platform and tokens are already integrated with Blockbook. Custom hardware wallet support currently exists via ElectrumSys. First-class HW wallet integration through apps such as Ledger Live will exist after 4.2.
Current supported wallets
Syscoin Spark Desktop
Syscoin-Qt

Explorers

Mainnet: https://sys1.bcfn.ca (Blockbook)
Testnet: https://explorer-testnet.blockchainfoundry.co

Thank you for close consideration of our proposal. We look forward to feedback, and to working with the Reddit community to implement an ideal solution using Syscoin Platform!

submitted by sidhujag to ethereum [link] [comments]

AMM + Limit Order, Will OneSwap Replace Traditional Exchange?

When a thing is denied, something new starts at a higher level.
The update and iteration of the currency circle takes only a few days.
On August 13, Yam, the token of a popular DeFi project, plummeted by 98%, while YFI, another DeFi cryptocurrency, outran the digital currency Bitcoin Gold by value under capital operation.
According to their familiarity with DeFi, blockchain investors in 2020 can be divided into two categories. The "New" investors are active in DEXs such as UniSwap and Balancer, striving for hundredfold returns on investment amid fake projects, while the "old" investors stick to mainstream cryptocurrencies and advocate value investment in the three major CEXs.
Despite its long history, DEX did not prosper until recently. It has processed transactions of over US$520 million in the past 24 hours, and the trading volume for the past week has exceeded the figure across 2019.
But still, many people are stranger to DEX.
I. Will DEX shuffle the existing trading market?
Upon discovering something new, you can describe it, but never evaluate it superficially.
UniSwap occupies 55% of the entire DEX market. Celebrities in the circle enjoy discussing the changes brought by UniSwap on social media and how it will change the existing trading landscape.
On August 5, Jay, CEO of OKEX Exchange, publicly stated that "UniSwap can hardly replace the current mainstream exchanges." on Weibo.
He also listed two reasons:
  1. With insufficient transaction depth, UniSwap cannot support large transactions;
  2. UniSwap cannot set prices independently, but has to follow the prices set by other exchanges.
He also recognized UniSwap’s AMM model in the post.
Soon this post was criticized by Dovy, the founding partner of Primitive Ventures, to the effect that Jay had quite limited knowledge about DeFi and the reasons he proposed did not hold good.
She also mentioned the advantages of a new generation of DEX represented by UniSwap:
Traditional exchanges determine the price and market value according to a small number of chips in the market. By comparison, AMM relies on the entire LP pool to contribute liquidity, and a small number of chips will not lead to severe fluctuations in the price. The price follows the curve of the static liquidity pool within a time range, rather than the manually controlled order book.
2. Is UniSwap good enough to replace centralized exchanges?
Neither OK or Binance had expected that one day their arch rival was not each other, but the newly emerging decentralized exchanges.
With totally different operating methods and business models, DEX and CEX have their own merits.
CEX comes with evident problems. Ordinary users do not trust its security due to the rampant data cheating. For project developers, CEX requires high fees for token listing and maintenance.
The advantage of CEX lies in its low threshold and mature business model.
Just as Jay said, DEXs represented by UniSwap are still faced with great challenges posed by user habits. For example, UniSwap does not support limit orders or the candlestick chart, and users need to rely on a third-party Ethereum wallet for operation.
The innovative AMM model allows ordinary users and small market makers to get involved and earn market-making fees, reducing costs and improving liquidity.
According to the trading volume at this time, UniSwap may not be able to replace mainstream exchanges, but it is good enough to replace second and third-tier exchanges.
3. Is OneSwap an upgraded version or a copy of UniSwap?
"The success of UniSwap proves the necessity of the DEX that does not require permission and supports AMM in the market. However, UniSwap comes with two shortcomings. One is the lack of support for limit orders, which greatly restricts trading methods and liquidity; The other is the excessive transaction cost and poor transaction efficiency due to the limited processing capacity of Ethereum." - Yang Haipo
Recently, OneSwap, known as the upgraded version of UniSwap, announced that it will hit the market in early September, and has received an investment of US$10 million from CoinEX.
To develop an open-source centralized trading platform like OneSwap, it is easy to replicate the technique. But among so many Swap applications in the market, what advantages does OneSwap have over UniSwap?
1. Limit orders
Neither buyers or sellers of UniSwap can set prices independently; instead, they need to follow the prices set by other exchanges. If they want to buy tokens at a specific price, they have no choice but to wait till tokens at such a price appear in UniSwap, a waste of time.
Continuing the good practices of centralized exchanges, OneSwap supports the traditional order book based on rapid exchange, offering more flexible trading methods and further enhancing the liquidity of digital assets.
2. The candlestick chart and depth map
Without an order book, UniSwap has been criticized for its simple transaction interface which does not even contain the basic candlestick chart. As a result, it cannot satisfy numerous traders’ demand for data analysis.
To benchmark against the centralized exchange in terms of user experience, OneSwap has introduced functions such as the candlestick chart, order ticket, and depth map. Just like centralized exchanges with professional charts, OneSwap provided the price trend, trading volume, depth, and other information of different cryptocurrencies for users to set out informed trading plans.
3. Liquidity mining + transaction mining
UniSwap’s AMM model is believed to be a vital catalyst for its explosive growth. With an additional incentive mechanism of transaction mining besides liquidity mining, OneSwap leaves more core benefits to its users.
OneSwap will charge the Taker a fixed percentage of transaction fees based on the transaction amount, while the Maker does not need to pay. The transaction fees are divided into two parts: 60% for liquidity and 40% for the repurchase and burning of ONES. In transaction mining, both liquidity providers and traders will receive ONES as an economic incentive.
The market is looking forward to a new product that is as user-friendly as CEX and as safe as DEX. Is OneSwap qualified to meet such demands?
submitted by jessicazhang922 to defi [link] [comments]

Price Discovery in Bitcoin exchange

About thirty days ago I shared a chart on Price Discovery in this sub. There was a lot of interest in it and I promised to explain in detail a Bitcoin price discovery algorithm.. I do so in this post.
*this text post is a slightly shorter version of what I wrote in my blog.

TL;DR

I applied price discovery algorithms to 5 Min OHLCV data from Bitmex and CME contracts and Bitstamp, Coinbase, HitBTC, Kraken, Poloniex, Binance, and OkEx BTCUSD/BTCUSDT markets from March 2016 to May 2020. Some exciting results I got was:

Introduction

Price discovery is the overall process of setting the price of an asset. Price discovery algorithms identify the leader exchanges whose traders define the price. Two approaches are most famous for use in Price Discovery. Gonzalo and Granger (1995) and Hasbrouck (1995). But they assume random walk, and a common efficient price. I do not feel comfortable assuming random walk and common efficient price in Bitcoin Markets. So I used this little know method by De Blasis (2019) for this analysis. This work assumes that "the fastest price to reflect new information releases a price signal to the other slower price series." I thought this was valid in our market. It uses Markov Chains to measure Price Discovery. Without going into the mathematical details the summary steps used was:
De Blasis (2019) names this number Price Leadership Share (PLS). High PLS indicates a large role in price discovery. As the sum of the numbers is 1, they can be looked at as a percentage contribution. I recommend reading the original paper if you are interested to know more about the mathematical detail.

Data

Andersen (2000) argues that 5 Minute window provides the best trade-off between getting enough data and avoiding noise. In one of the first work on Bitcoin's Price Discovery, Brandvold et al. 2015 had used 5M window. So I obtained 5M OHLCV data using the following sources:
Futures data are different from other data because multiple futures contract trades at the same time. I formed a single data from the multiple time series by selecting the nearest contract until it was three days from expiration. I used the next contract when the contract was three days from expiration. This approach was advocated by Booth et al ( 1999 )

Analysis

I can't embed the chart on reddit so open this https://warproxxx.github.io/static/price_discovery.html
In the figure above, each colored line shows the total influence the exchange had towards the discovery of Bitcoin Price on that day. Its axis is on the left. The black line shows a moving average of the bitcoin price at the close in Bitfinex for comparison. The chart was created by plotting the EMA of price and dominance with a smoothing factor of 0.1. This was done to eliminate the noise. Let's start looking from the beginning. We start with a slight Bitfinex dominance at the start. When the price starts going up, Bitfinex's influence does too. This was the time large Tether printing was attributed to the rise of price by many individuals. But Bitfinex's influence wanes down as the price starts rising (remember that the chart is an exponential moving average. Its a lagging indicator). Afterward, exchanges like Binance and Bitstamp increase their role, and there isn't any single leader in the run. So although Bitfinex may have been responsible for the initial pump trades on other exchanges were responsible for the later rally.
CME contracts were added to our analysis in February 2018. Initially, they don't have much influence. On a similar work Alexandar and Heck (2019) noted that initially CBOE contracts had more influence. CBOE later delisted Bitcoin futures so I couldn't get that data. Overall, Bitmex and CME contracts have been averaging around 50% of the role in price discovery. To make the dominance clear, look at this chart where I add Bitmex Futures and Perp contract's dominance figure to create a single dominance index. There bitmex leads 936 of the total 1334 days (Bitfinex leads 298 days and coinbase and binance get 64 and 6 days). That is a lot. One possible reason for this might be Bitmex's low trading fee. Bitmex has a very generous -0.025% maker fee and price discovery tend to occur primarily in the market with smaller trading costs (Booth et al, 1999). It may also be because our market is mature. In mature markets, futures lead the price discovery.
Exchange bitmex_futures bitfinex coinbase bitmex okex binance cme bitstamp okcoin kraken poloniex
Days Lead 571 501 102 88 34 12 8 7 6 4 1
 Table 1: Days Lead 
Out of 1334 days in the analysis, Bitmex futures leads the discovery in 571 days or nearly 43% of the duration. Bitfinex leads for 501 days. Bitfinex's high number is due to its extreme dominance in the early days.
Exchange binance huobi cme okcoin bitmex_futures okex hitbtc kraken poloniex bitstamp bitfinex coinbase bitmex
Correlation 0.809190 0.715667 0.648058 0.644432 0.577147 0.444821 0.032649 -0.187348 -0.365175 -0.564073 -0.665008 -0.695115 -0.752103
 Table 2: Correlation between the close price and Exchange's dominance index 
Binance, Huobi, CME, and OkCoin had the most significant correlation with the close price. Bitmex, Coinbase, Bitfinex, and Bitstamp's dominance were negatively correlated. This was very interesting. To know more, I captured a yearwise correlation.
index 2016 2017 2018 2019 2020
0 bitfinex 0.028264 -0.519791 0.829700 -0.242631 0.626386
1 bitmex 0.090758 -0.752297 -0.654742 0.052242 -0.584956
2 bitmex_futures -0.011323 -0.149281 -0.458857 0.660135 0.095305
3 bitstamp 0.316291 -0.373688 0.600240 -0.255408 -0.407608
4 coinbase -0.505492 -0.128336 -0.351794 -0.410874 -0.262036
5 hitbtc 0.024425 0.486229 0.104912 -0.200203 0.308862
6 kraken 0.275797 0.422656 0.294762 -0.064594 -0.192290
7 poloniex 0.177616 -0.087090 0.230987 -0.135046 -0.154726
8 binance NaN 0.865295 0.706725 -0.484130 0.265086
9 okcoin NaN 0.797682 0.463455 -0.010186 -0.160217
10 huobi NaN 0.748489 0.351514 -0.298418 0.434164
11 cme NaN NaN -0.616407 0.694494 -0.012962
12 okex NaN NaN -0.618888 -0.399567 0.432474
Table 3: Yearwise Correlation between the close price and Exchange's dominance index
Price movement is pretty complicated. If one factor, like a dominant exchange, could explain it, everyone would be making money trading. With this disclaimer out of the way, let us try to make some conclusions. This year Bitfinex, Huobi, and OkEx, Tether based exchanges, discovery power have shown a high correlation with the close price. This means that when the traders there become successful, price rises. When the traders there are failing, Bitmex traders dominate and then the price is falling. I found this interesting as I have been seeing the OkEx whale who has been preceding price rises in this sub. I leave the interpretation of other past years to the reader.

Limitations

My analysis does not include market data for other derivative exchanges like Huobi, OkEx, Binance, and Deribit. So, all future market's influence may be going to Bitmex. I did not add their data because they started having an impact recently. A more fair assessment may be to conclude this as the new power of derivative markets instead of attributing it as the power of Bitmex. But Bitmex has dominated futures volume most of the time (until recently). And they brought the concept of perpetual swaps.

Conclusion

There is a lot in this data. If you are making a trading algo think there is some edge here. Someday I will backtest some trading logic based on this data. Then I will have more info and might write more. But, this analysis was enough for to shift my focus from a Bitfinex based trading algorithm to a Bitmex based one. It has been giving me good results.
If you have any good ideas that you want me to write about or discuss further please comment. If there is enough interest in this measurement, I can setup a live interface that provides the live value.
submitted by warproxxx to BitcoinMarkets [link] [comments]

Why Ethereum Problems Make UMI the Flagship Among the New Generation Cryptocurrencies

Why Ethereum Problems Make UMI the Flagship Among the New Generation Cryptocurrencies

https://preview.redd.it/8skuypxp9lj51.jpg?width=1023&format=pjpg&auto=webp&s=ba5a38ba592428f92dc7c1943a780ff127132875
Ethereum cryptocurrency that comes second in terms of capitalization on the crypto market is traditionally seen as fast and profitable. However, over the last few weeks it's had a rough patch. Since early August, the network has had huge queues of transactions pending processing while fees have skyrocketed and surpassed the historical high.
The main issue though is that even fees of a few dollars per transfer don't help get rid of the“traffic jams”. The cause of this is numerous DeFi projects and a huge number of financial pyramids based on the Ethereum platform. Both generate excessive load on the network.
The situation is downright unpleasant, and our users might question whether the UMI network could face a similar challenge? We'd like to assure you it could not. The UMI network is by default protected against these problems — it cannot have “traffic jams”, fees or financial pyramids. But first things first.
How has the Ethereum network ground to a halt?
In its report dated August 4, Arcane Research that provides analysis within the field of cryptocurrency stated that over the previous week the daily size of transaction fees in the Ethereum network has surged up to a record high for over two and a half years. On August 3, the median value #%D0%9F%D1%80%D0%B8%D0%BC%D0%B5%D1%80_%D0%B8%D1%81%D0%BF%D0%BE%D0%BB%D1%8C%D0%B7%D0%BE%D0%B2%D0%B0%D0%BD%D0%B8%D1%8F)of the fee amounted to $0.82, with the overall amount of transaction fees totaling $2 mln. However, it only signaled the start of real problems.
Over the next week, fees continued to grow and by August 11 the median fee value almost doubled equaling $1.57. Larry Cermak, an expert at a big analytical and news-making crypto portal The Block, wrote in his August 15 tweet that over a week the total amount of transaction fees in the Ethereum network totaled $34.5 mln, having surpassed its historical high. Meanwhile, in the Bitcoin network that is seen as too expensive the fees were almost four times lower at $9 mln.
The total fee amount paid by cryptocurrency users over a week:
  • Ethereum — $34.5 mln;
  • Bitcoin — $9 mln;
  • Monero — $2,240;
  • Tezos — $1,876;
  • Cardano — $1,615;
  • XRP — $1,138;
  • BSV — $1,102;
  • Stellar — $1,059;
  • Bitcoin Cash — $1,027;
  • UMI — $0. Let's talk about it a little later.

https://preview.redd.it/z9azd9v6alj51.png?width=1600&format=png&auto=webp&s=25c365d6e14665ecda4a2b8d19b2fc57dd5cde1e
Historical Growth Chart for Ethereum Fees. Source
The existing situation shows that Ethereum is actually not as fast and profitable as commonly cited. Additionally, this could happen to almost any cryptocurrency except UMI that charges no fees whatsoever. We will tell you why.
Why have these problems emerged?
There is nothing unoriginal: the Ethereum network simply can't handle an increased load. Arcane Research analysts consider that a principal cause of this situation is the constantly increasing number of the DeFi ecosystem projects built on the Ethereum blockchain. Their number is growing all the time which causes the overload of the network. As of August 12, the total amount of funds in DeFi applications reached $4.3 billion which is 19.5% higher than that in the past week. At the time of writing this article, the amount surged to $6.21 billion. You can see the current data here. What is the most unpleasant about DeFi protocols is that a lot of them are scam projects.
Which is not the worst part though. There is also another factor that significantly slows down the Ethereum network. There are a lot of pyramid-like projects that are built on the EOS platform and use smart contracts. One of them is SmartWay Forsage, which regularly overloads the network with a large number of transactions, causes traffic jams, and, consequently, leads to increased fees (keep in mind that Ethereum miners choose transactions with a higher commission). Vitalik Buterin, the co-founder of Ethereum, revealed his disapproval of the SmartWay Forsage methodology and asked them to "leave and not pollute Ethereum ecology in the future". However, the project is slow to do this — it continues to deceive users.
This is only the tip of the iceberg of scam projects which abounds on the EOS network –– they continually emerge, work for a while, then go down as scams and are replaced with new ones. This never-ending stream of "investment projects" based on the Ponzi scheme overloads the system. This is the reason why Adam Back, a pioneer of the crypto industry and founder of the technology company Blockstream, equated Ethereum with such infamous projects as Onecoin and Bitconnect. Adam Back's solid dig at Ethereum became the subject of much debate among crypto enthusiasts.
Of course, it all doesn't mean that Ethereum is a bad cryptocurrency. On the contrary, it has a lot of advantages over other coins. But all that has happened exposes Ethereum's faults which must be eliminated. The problem is that they may not be fixable. It is far from certain that the developers will be able to get rid of all the defects as the system has huge scalability problems.
The crypto community has to admit that Ethereum, like other first-generation cryptocurrencies, has issues with capacity, fees, and scalability and is gradually becoming obsolete.
2020 is the time for young innovative cryptocurrencies such as UMI.
UMI is the flagship of new-generation cryptocurrencies.
In real fact, any cryptocurrency could face it. Each cryptocurrency charges fees which typically surge when the network is overloaded or the price is going up. Everyone will remember 2017 when in line with price growth and the network's overload Bitcoin transaction fee reached a high of around $40.
But when it comes to UMI, it works the other way round. The UMI network's advantages are high capacity, no fees, and scaling possibilities. It uses the best and fastest crypto industry solutions and excludes all inefficient methods by default. Smart optimization in combination with the Proof-of-Authority technology operating on the master node basis enables almost instant payments.
At the stage of network testing, an incredibly high capacity was achieved:
  • up to 4,369 transactions per second;
  • up to 262,140 transactions per minute;
  • up to 15,728,400 transactions per hour;
  • up to 377,481,600 transactions per day.
Ethereum processes about 20 transactions per second. It means that the UMI network can process transactions that Ethereum processes over a year in 1 to 5 days — and with no fees.
https://preview.redd.it/rwohnov3alj51.png?width=1125&format=png&auto=webp&s=4329b75c0bd8b7a22276b529f5ca433d17a0874f
The UMI network can process transactions that Ethereum processes over a year in a few days and with no fees. More details
What is more important is that less than 0.001% of the network's overall potential is used now. The UMI network has a lot of reserve capacity and can handle hundreds of thousands of times heavier load. Moreover, with scaling possibilities, UMI can keep up with the times. The UMI code ensures the safe introduction of any upgrades — the network can be easily modified and scaled with cutting edge technology solutions. In other words, traffic jams will never pose a problem for us. UMI will instantly process all transactions, with no fees. Always.
https://preview.redd.it/t0068th0alj51.png?width=544&format=png&auto=webp&s=019f46ec8c093480c4638cf098312a5a146134a8
A real-time speedometer displays the number of transactions processed by the UMI network per second. Link
Additionally, unlike Ethereum and other cryptocurrencies, the UMI's staking smart contract prevents possibilities of any pyramid schemes, meaning eliminates their negative influence. Our staking is completely safe and secured against scammers. Read more about this in our article. Any UMI staking structure could work forever. In other words, you can multiply your coins at a rate of up to 40% per month for an indefinitely long period of time.
UMI doesn't inherit the disadvantages of the first-generation cryptocurrencies. This is an innovative, carefully designed network based on state-of-the-art technologies. UMI is an ambitious step toward the future. And we're making it together right now!
Sincerely yours, UMI team
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Crypto Banking Wars: Will Coinbase or Binance Become The Bank of The Future?

Crypto Banking Wars: Will Coinbase or Binance Become The Bank of The Future?
Can the early success of major crypto exchanges propel them to winning the broader consumer finance market?
https://reddit.com/link/i48t4q/video/v4eo10gom7f51/player
This is the first part of Crypto Banking Wars — a new series that examines what crypto-native company is most likely to become the bank of the future. Who is best positioned to reach mainstream adoption in consumer finance?
While crypto allows the world to get rid of banks, a bank will still very much be necessary for this powerful technology to reach the masses. We believe a crypto-native company, like Genesis Block, will become the bank of the future.
In an earlier series, Crypto-Powered, we laid out arguments for why crypto-native companies have a huge edge in the market. When you consider both the broad spectrum of financial use-cases and the enormous value unlocked through these DeFi protocols, you can see just how big of an unfair advantage blockchain tech becomes for companies who truly understand and leverage it. Traditional banks and fintech unicorns simply won’t be able to keep up.
The power players of consumer finance in the 21st century will be crypto-native companies who build with blockchain technology at their core.
The crypto landscape is still nascent. We’re still very much in the fragmented, unbundled phase of the industry lifecycle. Beyond what Genesis Block is doing, there are signs of other companies slowly starting to bundle financial services into what could be an all-in-one bank replacement.
So the key question that this series hopes to answer:
Which crypto-native company will successfully become the bank of the future?
We obviously think Genesis Block is well-positioned to win. But we certainly aren’t the only game in town. In this series, we’ll be doing an analysis of who is most capable of thwarting our efforts. We’ll look at categories like crypto exchanges, crypto wallets, centralized lending & borrowing services, and crypto debit card companies. Each category will have its own dedicated post.
Today we’re analyzing big crypto exchanges. The two companies we’ll focus on today are Coinbase (biggest American exchange) and Binance (biggest global exchange). They are the top two exchanges in terms of Bitcoin trading volume. They are in pole position to winning this market — they have a huge existing userbase and strong financial resources.
Will Coinbase or Binance become the bank of the future? Can their early success propel them to winning the broader consumer finance market? Is their growth too far ahead for anyone else to catch up? Let’s dive in.
https://preview.redd.it/lau4hevpm7f51.png?width=800&format=png&auto=webp&s=2c5de1ba497199f36aa194e5809bd86e5ab533d8

Binance

The most formidable exchange on the global stage is Binance (Crunchbase). All signs suggest they have significantly more users and a stronger balance sheet than Coinbase. No other exchange is executing as aggressively and relentlessly as Binance is. The cadence at which they are shipping and launching new products is nothing short of impressive. As Tushar Jain from Multicoin argues, Binance is Blitzscaling.
Here are some of the products that they’ve launched in the last 18 months. Only a few are announced but still pre-launch.
Binance is well-positioned to become the crypto-powered, all-in-one, bundled solution for financial services. They already have so many of the pieces. But the key question is:
Can they create a cohesive & united product experience?

Binance Weaknesses

Binance is strong, but they do have a few major weaknesses that could slow them down.
  1. Traders & Speculators Binance is currently very geared for speculators, traders, and financial professionals. Their bread-and-butter is trading (spot, margin, options, futures). Their UI is littered with depth charts, order books, candlesticks, and other financial concepts that are beyond the reach of most normal consumers. Their product today is not at all tailored for the broader consumer market. Given Binance’s popularity and strength among the pro audience, it’s unlikely that they will dumb down or simplify their product any time soon. That would jeopardize their core business. Binance will likely need an entirely new product/brand to go beyond the pro user crowd. That will take time (or an acquisition). So the question remains, is Binance even interested in the broader consumer market? Or will they continue to focus on their core product, the one-stop-shop for pro crypto traders?
  2. Controversies & Hot Water Binance has had a number of controversies. No one seems to know where they are based — so what regulatory agencies can hold them accountable? Last year, some sensitive, private user data got leaked. When they announced their debit card program, they had to remove mentions of Visa quickly after. And though the “police raid” story proved to be untrue, there are still a lot of questions about what happened with their Shanghai office shut down (where there is smoke, there is fire). If any company has had a “move fast and break things” attitude, it is Binance. That attitude has served them well so far but as they try to do business in more regulated countries like America, this will make their road much more difficult — especially in the consumer market where trust takes a long time to earn, but can be destroyed in an instant. This is perhaps why the Binance US product is an empty shell when compared to their main global product.
  3. Disjointed Product Experience Because Binance has so many different teams launching so many different services, their core product is increasingly feeling disjointed and disconnected. Many of the new features are sloppily integrated with each other. There’s no cohesive product experience. This is one of the downsides of executing and shipping at their relentless pace. For example, users don’t have a single wallet that shows their balances. Depending on if the user wants to do spot trading, margin, futures, or savings… the user needs to constantly be transferring their assets from one wallet to another. It’s not a unified, frictionless, simple user experience. This is one major downside of the “move fast and break things” approach.
  4. BNB token Binance raised $15M in a 2017 ICO by selling their $BNB token. The current market cap of $BNB is worth more than $2.6B. Financially this token has served them well. However, given how BNB works (for example, their token burn), there are a lot of open questions as to how BNB will be treated with US security laws. Their Binance US product so far is treading very lightly with its use of BNB. Their token could become a liability for Binance as it enters more regulated markets. Whether the crypto community likes it or not, until regulators get caught up and understand the power of decentralized technology, tokens will still be a regulatory burden — especially for anything that touches consumers.
  5. Binance Chain & Smart Contract Platform Binance is launching its own smart contract platform soon. Based on compatibility choices, they have their sights aimed at the Ethereum developer community. It’s unclear how easy it’ll be to convince developers to move to Binance chain. Most of the current developer energy and momentum around smart contracts is with Ethereum. Because Binance now has their own horse in the race, it’s unlikely they will ever decide to leverage Ethereum’s DeFi protocols. This could likely be a major strategic mistake — and hubris that goes a step too far. Binance will be pushing and promoting protocols on their own platform. The major risk of being all-in on their own platform is that they miss having a seat on the Ethereum rocket ship — specifically the growth of DeFi use-cases and the enormous value that can be unlocked. Integrating with Ethereum’s protocols would be either admitting defeat of their own platform or competing directly against themselves.

Binance Wrap Up

I don’t believe Binance is likely to succeed with a homegrown product aimed at the consumer finance market. Their current product — which is focused heavily on professional traders and speculators — is unlikely to become the bank of the future. If they wanted to enter the broader consumer market, I believe it’s much more likely that they will acquire a company that is getting early traction. They are not afraid to make acquisitions (Trust, JEX, WazirX, DappReview, BxB, CoinMarketCap, Swipe).
However, never count CZ out. He is a hustler. Binance is executing so aggressively and relentlessly that they will always be on the shortlist of major contenders.
https://preview.redd.it/mxmlg1zqm7f51.png?width=800&format=png&auto=webp&s=2d900dd5ff7f3b00df5fe5a48305d57ebeffaa9a

Coinbase

The crypto-native company that I believe is more likely to become the bank of the future is Coinbase (crunchbase). Their dominance in America could serve as a springboard to winning the West (Binance has a stronger foothold in Asia). Coinbase has more than 30M users. Their exchange business is a money-printing machine. They have a solid reputation as it relates to compliance and working with regulators. Their CEO is a longtime member of the crypto community. They are rumored to be going public soon.

Coinbase Strengths

Let’s look at what makes them strong and a likely contender for winning the broader consumer finance market.
  1. Different Audience, Different Experience Coinbase has been smart to create a unique product experience for each audience — the pro speculator crowd and the common retail user. Their simple consumer version is at Coinbase.com. That’s the default. Their product for the more sophisticated traders and speculators is at Coinbase Pro (formerly GDAX). Unlike Binance, Coinbase can slowly build out the bank of the future for the broad consumer market while still having a home for their hardcore crypto traders. They aren’t afraid to have different experiences for different audiences.
  2. Brand & Design Coinbase has a strong product design team. Their brand is capable of going beyond the male-dominated crypto audience. Their product is clean and simple — much more consumer-friendly than Binance. It’s clear they spend a lot of time thinking about their user experience. Interacting directly with crypto can sometimes be rough and raw (especially for n00bs). When I was at Mainframe we hosted a panel about Crypto UX challenges at the DevCon4 Dapp Awards. Connie Yang (Head of Design at Coinbase) was on the panel. She was impressive. Some of their design philosophies will bode well as they push to reach the broader consumer finance market.
  3. USDC Stablecoin Coinbase (along with Circle) launched USDC. We’ve shared some stats about its impressive growth when we discussed DeFi use-cases. USDC is quickly becoming integrated with most DeFi protocols. As a result, Coinbase is getting a front-row seat at some of the most exciting things happening in decentralized finance. As Coinbase builds its knowledge and networks around these protocols, it could put them in a favorable position to unlock incredible value for their users.
  4. Early Signs of Bundling Though Coinbase has nowhere near as many products & services as Binance, they are slowly starting to add more financial services that may appeal to the broader market. They are now letting depositors earn interest on USDC (also DAI & Tezos). In the UK they are piloting a debit card. Users can now invest in crypto with dollar-cost-averaging. It’s not much, but it’s a start. You can start to see hints of a more bundled solution around financial services.

Coinbase Weaknesses

Let’s now look at some things that could hold them back.
  1. Slow Cadence In the fast-paced world of crypto, and especially when compared to Binance, Coinbase does not ship very many new products very often. This is perhaps their greatest weakness. Smaller, more nimble startups may run circles around them. They were smart to launch Coinbase Ventures where tey invest in early-stage startups. They can now keep an ear to the ground on innovation. Perhaps their cadence is normal for a company of their size — but the Binance pace creates quite the contrast.
  2. Lack of Innovation When you consider the previous point (slow cadence), it’s unclear if Coinbase is capable of building and launching new products that are built internally. Most of their new products have come through acquisitions. Their Earn.com acquisition is what led to their Earn educational product. Their acquisition of Xapo helped bolster their institutional custody offering. They acqui-hired a team to help launch their staking infrastructure. Their acquisition of Cipher Browser became an important part of Coinbase Wallet. And recently, they acquired Tagomi — a crypto prime brokerage. Perhaps most of Coinbase’s team is just focused on improving their golden goose, their exchange business. It’s unclear. But the jury is still out on if they can successfully innovate internally and launch any homegrown products.
  3. Talent Exodus There have been numerous reports of executive turmoil at Coinbase. It raises a lot of questions about company culture and vision. Some of the executives who departed include COO Asiff Hirji, CTO Balaji Srinivasan, VP & GM Adam White, VP Eng Tim Wagner, VP Product Jeremy Henrickson, Sr Dir of Eng Namrata Ganatra, VP of Intl Biz Dan Romero, Dir of Inst Sales Christine Sandler, Head of Trading Hunter Merghart, Dir Data Science Soups Ranjan, Policy Lead Mike Lempres, Sr Compliance Vaishali Mehta. Many of these folks didn’t stay with Coinbase very long. We don’t know exactly why it’s happening —but when you consider a few of my first points (slow cadence, lack of innovation), you have to wonder if it’s all related.
  4. Institutional Focus As a company, we are a Coinbase client. We love their institutional offering. It’s clear they’ve been investing a lot in this area. A recent Coinbase blog post made it clear that this has been a focus: “Over the past 12 months, Coinbase has been laser-focused on building out the types of features and services that our institutional customers need.” Their Tagomi acquisition only re-enforced this focus. Perhaps this is why their consumer product has felt so neglected. They’ve been heavily investing in their institutional services since May 2018. For a company that’s getting very close to an IPO, it makes sense that they’d focus on areas that present strong revenue opportunities — as they do with institutional clients. Even for big companies like Coinbase, it’s hard to have a split focus. If they are “laser-focused” on the institutional audience, it’s unlikely they’ll be launching any major consumer products anytime soon.

Coinbase Wrap Up

At Genesis Block, we‘re proud to be working with Coinbase. They are a fantastic company. However, I don’t believe that they’ll succeed in building their own product for the broader consumer finance market. While they have incredible design, there are no signs that they are focused on or capable of internally building this type of product.
Similar to Binance, I think it’s far more likely that Coinbase acquires a promising young startup with strong growth.

Honorable Mentions

Other US-based exchanges worth mentioning are Kraken, Gemini, and Bittrex. So far we’ve seen very few signs that any of them will aggressively attack broader consumer finance. Most are going in the way of Binance — listing more assets and adding more pro tools like margin and futures trading. And many, like Coinbase, are trying to attract more institutional customers. For example, Gemini with their custody product.

Wrap Up

Coinbase and Binance have huge war chests and massive reach. For that alone, they should always be considered threats to Genesis Block. However, their products are very, very different than the product we’re building. And their approach is very different as well. They are trying to educate and onboard people into crypto. At Genesis Block, we believe the masses shouldn’t need to know or care about it. We did an entire series about this, Spreading Crypto.
Most everyone needs banking — whether it be to borrow, spend, invest, earn interest, etc. Not everyone needs a crypto exchange. For non-crypto consumers (the mass market), the differences between a bank and a crypto exchange are immense. Companies like Binance and Coinbase make a lot of money on their crypto exchange business. It would be really difficult, gutsy, and risky for any of them to completely change their narrative, messaging, and product to focus on the broader consumer market. I don’t believe they would ever risk biting the hand that feeds them.
In summary, as it relates to a digital bank aimed at the mass market, I believe both Coinbase and Binance are much more likely to acquire a startup in this space than they are to build it themselves. And I think they would want to keep the brand/product distinct and separate from their core crypto exchange business.
So back to the original question, is Coinbase and Binance a threat to Genesis Block? Not really. Not today. But they could be, and for that, we want to stay close to them.
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Cryptocurrency technical analysis: bears drive the crypto market movement

Cryptocurrency technical analysis: bears drive the crypto market movement

Cryptocurrency technical analysis: bears drive the crypto market movement
The negative sentiment continues to reign in the crypto asset market, as indicated by technical and fundamental analyzes. Thus, the drop in demand for many top altcoins caused by the bitcoin correction has already led to the fact that the bears have reached many targets located in the support area. At the same time, several interesting events took place on the crypto market over the past working week. On July 15, it became known that the Chinese authorities will test the digital yuan on the largest supplier of groceries and food delivery Meituan Dianping. The work of the Chinese CBDC is already being tested by McDonald’s corporations, Starbucks and DiDi, the largest taxi aggregator in the Middle Kingdom. On June 16, Samsung announced the start of a partnership with Stellar, within which the developments of the blockchain project will be integrated into the Samsung Blockchain Keystore and Samsung Galaxy smartphones. Also, one cannot fail to note the large-scale hacking of the social network Twitter. On the night of July 15–16, unknown attackers gained access to 130 accounts of prominent businessmen, politicians and opinion leaders. As a result, fake Elon Musk, Changpen Zhao, Bill Gates and Barack Obama posted messages calling for bitcoins to be sent to them, which allowed them to collect 12.86 BTC.

Bitcoin

On the four-hour chart, bitcoin develops a very clear movement along the levels from the point of view of technical analysis. After retesting the resistance at $9500 and the lower boundary of the “Triangle” pattern, BTC quotes rushed down to the first target at $9150. If in the coming days the price consolidates below the support level, then in the short term we should expect the development of a downtrend. The closest targets for sellers will be $9000 and $8760 (38.2% correction at Fibonacci levels). At the same time, the persistence of negative sentiment in the stock market will be a signal for the digital currency market, which will continue to fall until the beginning of autumn and the recovery of the business cycle.
In the long term, this may lead to a decline to supports at $8330 and $8050. But in order to push the price lower, the bears will need to exert enormous forces. Moreover, from these levels, whales will begin to gain new positions, which will push the bitcoin price up and launch a medium-term growth trend. It will confirm its departure above the 200-day simple moving average (SMA) line and the closing of Japanese candlesticks above $9500. In the long term, this will make it possible to achieve medium-term goals in the form of clusters of $9,900- $10,000 and $10,400- $10,500.

BTC / USD chart, four-hour timeframe

So far, the first cryptocurrency also cannot form a global trend, and this has led to the fact that Bitcoin continues to consolidate movement within the $8900 cluster (50% correction at Fibonacci levels) — $9580. BTC quotes have already dropped below the $9,300 level, which could lead to sales up to $8,900. In the future, we should expect Bitcoin to test the targets of $8600 and $8220, where the 200-day moving average (MA) line and the lower border of the technical analysis model “Triangle” (on the chart below, its borders are marked in orange).
For a short time, BTC quotes may even drop to supports at $7400 and $6800, but the forecast for the price rebound back up and the formation of a long-term upward trend seems more likely. This will allow Bitcoin to reach the $10,000 and $10,500 levels, and their subsequent breakout will allow the asset to rush to the $11,000, $11,200- $11,300 and $11,800 levels by the end of the year.

BTC / USD chart, daily timeframe

Ethereum

The altcoin market is also developing neutral dynamics so far, but more and more signals appear on the charts that speak in favor of the development of a downward movement.
Big capital is not yet ready to acquire digital assets at a price that has grown strongly since March.
Ether price develops along the $233 level (11.4% Fibonacci retracement line) and within the framework of consolidation within the $220- $251 range. The drop in the total demand for digital assets will lead to a decrease in the cost of ether towards the first target in the form of consolidation of $195- $200, where the 200-day MA line is located. The further course of trading will be determined by the appearance or absence of demand for cryptocurrencies. In the long term, by the end of the year, we should expect a move above $251 to the resistance areas of $280, $300 and $320.

ETH / USD chart, daily timeframe

Litecoin

On the daily chart, Litecoin continues to consolidate above the support boundaries in the form of a $40- $42 cluster, which takes the form of the Andrews Pitchfork technical analysis model. The development of the downward dynamics will lead to the fact that the cost of LTC will drop to $36 and $30.60. But in the medium term, we should expect the quotes to move above the 200-period MA line, which passes in the resistance area of $47.45. Overcoming it in the coming months will allow LTC quotes to soar to the levels of $51.50 (38.2% correctional level along the Fibonacci lines), $56.80, $60.80, $65 and $70.

LTC / USD chart, daily timeframe

Bitcoin Cash

The Bitcoin fork began to decline after the breakout and a very clear retest of the lower boundary of the technical analysis model “Triangle” (on the chart below, its boundaries are marked in pink). At the same time, the Bitcoin Cash quotes remain within the framework of a broader consolidation in the form of the “Horizontal Channel” $200- $272. However, the priority trading scenario remains a decline in Bitcoin Cash to the $200 level. There is also a high probability of updating the March lows in the $170 and $150 regions.
However, in the months ahead, expect BCH to move above $272, where the 200-day SMA line passes, paving the way to the $305, $356 and $400 levels.

BCH / USDT chart, daily timeframe

XRP

XRP is also under the influence of bears, leading to a decline towards the resistance level at $0.2050. In the coming weeks, the asset may test the support at $0.18, where the lower border of the Descending Triangle model lies. The development of the downward movement will allow XRP to test the support at $0.16 and $0.1470.
But in the medium term, a signal for a reversal of the downtrend may appear in the event of a break above the 200-day MA line passing at the level of $0.2360. If this happens, then in the second half of 2020 XRP will be able to reach important targets at the levels of $0.2540, $0.27, $0.2860 and $0.30.

XRP / USD chart, daily timeframe

Binance Coin

Binance Coin tried to break the bottom of the Ascending Triangle, but failed. The current quotes are supported by the 200-day SMA line and the boundaries of the $15.30- $16 area. Maintaining the downward momentum will allow BNB to rush down to the supports at $13.80 and $11.50.
But the most likely scenario looks like a final consolidation above the 200-day MA. This will open the way to the current resistances at $17 and $18.14, as well as the first target in the form of a $19.36- $20 cluster. Testing of the $21.30 and $23.50 levels is also expected in the coming months.

BNB / USDT chart, daily timeframe
Now more and more crypto assets are showing a willingness to succumb to bearish pressure, which will send quotes into a short decline that will last over the next few weeks. But by the end of the year, we should expect the activity of whales, which will begin to massively buy cryptocurrencies. This will undoubtedly send their value into a long-term upward rally.
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Cryptocurrency technical analysis: neutral market dynamics before a powerful movement

Cryptocurrency technical analysis: neutral market dynamics before a powerful movement

Cryptocurrency technical analysis: neutral market dynamics before a powerful movement
This week, most stock market assets showed a neutral movement, which did not give investors clear signals about the need to take bull or bear positions. This trend was reflected in the cryptocurrency market. So, bitcoin continues to move below the key level of $10,000 and is unlikely to overcome it in the coming days. At the same time, it is worth noting a number of positive factors for the development of the price dynamics of crypto assets. Experts from one of the largest US banks, JPMorgan, presented a review according to which in March, bitcoin successfully passed its first stress test “mostly positive”. It also became known that the Binance crypto exchange launches quarterly BTC / USD futures contracts with leverage up to 125x, which will be available to users of the Binance Futures platform. This positive news can return to the market bulls that are waiting for signals for a successful entry.

Bitcoin

From the point of view of technical analysis, on a four-hour chart, BTC quotes are preparing for the development of a powerful movement. This is facilitated by going beyond the current consolidation between support at $9150 and resistance at $9500, in the area of which the line of the 200-day simple moving average (SMA) runs. In the future, due to reduced liquidity, traders may begin to open bearish positions provided that bitcoin drops below $9150. In this scenario, BTC can go to targets at $8760 (38.2% Fibonacci retracement) and $8330.
A deeper decline is still unlikely, because in case of growth of capitalization of the stock market, part of the funds will be directed to the cryptocurrency market. But in the future months, we can expect quotes to go above the key level of $9500, which will allow Bitcoin to rush up to the target clusters of $9900– $10,000 and further to $10,400– $10,500.

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BTC / USD chart, daily timeframe.

Ethereum

Ethereum at the moment broke support at around $233, where the 11.4% Fibonacci retracement line runs, which allowed the altcoin to reach the important mark of $220. The next target for sellers will be the consolidation of $195– $200, below which is the line of the 200-day SMA. From this area, the ether will be ready to resume the upward movement to the first target of $251, overcoming of which will be a key condition for the continued development of the upward impulse. In this case, the goals for Ethereum will be the levels of $280, $300 and $320.

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Chart ETH / USD, daily timeframe.

Litecoin

Litecoin confidently reached the goal in the form of the upper boundary of the cluster $40– $42. However, further growth attempts are hampered by the 200-day SMA line, which is located at around $45. A strong impulse to sell can send LTC quotes down to the levels of $36 and $30.60.
However, it should be borne in mind that these marks are excellent opportunities for a set of positions for the purchase in the long term. In this case, the first target will be the level of $47.45. By the end of the year, traders will potentially be able to take profits at $52 (38.2% correctional level on the Fibonacci lines), $56.80, $60.80, $65 and $70.

https://preview.redd.it/31jo7rmf6h751.png?width=700&format=png&auto=webp&s=cf1d4fef4b8f68c97ba22bd84a56f392a030bd4f
LTC / USD chart, four hour timeframe.

Bitcoin cash

A bitcoin fork moves within the framework of the “Horizontal Channel” with borders of $200– $272. The asset is trying to gain a foothold above the level of $250 and the 200-day SMA line, which has become an important resistance for him. Going below $200 will cause BCH to drop to $170, and a break above $272 will provide an opportunity to take profits at $305, $356 and $400. Now trading Bitcoin Cash in the range of $200– $272 may bring more risk than profit, so the best strategy for conservative investors is to wait for going beyond this consolidation.

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BCH / USDT chart, four hour timeframe.

XRP

XRP further reduced volatility and went down beyond the boundaries of consolidation of $0.2050– $0.2360, which allowed to reach the target of $0.18 in the moment. Closing the daily candle below this mark will allow the bears to send the asset to $0.16 and $0.1470. However, a breakthrough of the $0.2360 level and the 200-day SMA line will allow XRP quotes to rush further to the target levels of $0.2540, $0.27, $0.2860 and $0.30.

https://preview.redd.it/0qainjxl6h751.png?width=700&format=png&auto=webp&s=057858229649d84b63611c8fdc78d67b8cb76f17
XRP / USD chart, daily timeframe.

Binance coin

Binance Coin quotes realized the forecast for the development of the downward movement in the region of the lower boundary of the region of $15.30– $16. But bears will need a lot of strength to overcome it, and if successful, they will be able to take profits at $13.80 and $11.50.
But in the long run, from these levels, the restoration of BNB quotes to the first
goals in the form of levels of $17 and $18.14 may begin. This scenario will be realized provided that an important mark of $16 is broken where the 200-day MA line passes. In the perspective of this year, whales may raise the value of the crypto asset of the Binance exchange to the goals of $19.36, $21.30 and $23.50.

https://preview.redd.it/l2devrqo6h751.png?width=700&format=png&auto=webp&s=6cff5b3c4d87de03fdd3f27074df500ac761bbb3
BNB / USDT chart, daily timeframe.
Top cryptocurrencies have recently shown a neutral trend, but it will not last long. Indeed, usually this is followed by a powerful movement of the crypto market, so traders should “fasten their seat belts” and prepare for active trading in the coming months.
submitted by Smart_Smell to Robopay [link] [comments]

Update TKEYSPACE 1.3.0 on Android

Update TKEYSPACE 1.3.0 on Android

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Version 1.3.0 is a powerful update to TkeySpace that our team has been carefully preparing. since version 1.2.0, we have been laying the foundation for implementing new features that are already available in the current version.
Who cares about the security and privacy of their assets is an update for you.
TkeySpace — was designed to give You full control over your digital assets while maintaining an exceptional level of security, which is why there is no personal data in the wallet: phone number, the email address that could be compromised by hackers — no identity checks and other hassles, just securely save the backup phrase consisting of 12 words.

Briefly about the TkeySpace 1.3.0 update :

  • Code optimization and switching to AndroidX;
  • New section-Privacy;
  • Built-in TOR;
  • Selecting the privacy mode;
  • Selecting the recovery method for each currency;
  • Choosing the address format for Litecoin;
  • Enhanced validation of transactions and blocks in the network;
  • Disk space optimization;
  • Accelerated syncing;
  • Checking “double spending”;
  • The bloom filter to check for nodes;
  • Updating the Binance and Ethereum libraries;
  • A function to hide the balance;
  • Advanced currency charts;
  • Access to charts without authentication;
  • News section;
  • Browser for Tkeycoin;
  • Independent Commission entry for Bitcoin;
  • New digital currencies;
  • Digital currency exchange tab.

Code optimization and switching to AndroidX

A lot of work has been done on optimizing the code to speed up the application, improving the logic, synchronization speed, calculating the hash of cryptocurrencies, and successfully switching to AndroidX.

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New section: Privacy

  • Enable Tor;
  • Blockchain transaction (the selection of the privacy mode);
  • Blockchain recovery (choosing a recovery method);
https://preview.redd.it/iydfwuhittx41.png?width=1080&format=png&auto=webp&s=2ce7c489d893a2ab6b9d6fede57d8b94404edcfb

TOR

Starting with the current update, the TkeySpace wallet can communicate via the TOR network, includes new privacy algorithms, and supports 59 different currencies.

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Tor is a powerful privacy feature for those who own large assets or live in places where the Internet is heavily censored.
Tor technology provides protection against traffic analysis mechanisms that compromise not only Internet privacy, but also the confidentiality of trade secrets, business contacts, and communications in General.
When you enable TOR settings, all outgoing traffic from the wallet will be encrypted and routed through an anonymous network of servers, periodically forming a chain through the Tor network, which uses multi-level encryption, effectively hiding any information about the sender: location, IP address, and other data.
This means that if your provider blocks the connection, you can rest easy — after all, by running this function, you will get an encrypted connection to the network without restrictions.

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In TOR mode, the wallet may work noticeably slower and in some cases, there may be problems with the network, due to encryption, some blockchain browsers may temporarily not work. However, TOR encryption is very important when Internet providers completely block traffic and switching to this mode, you get complete freedom and no blocks for transactions.

Confidentiality of transactions (the Blockchain transaction)

The wallet can change the model of a standard transaction, mixing inputs and outputs, making it difficult to identify certain cryptocurrencies. In the current update, you can select one of several modes for the transaction privacy level: deterministic lexicographic sorting or shuffle mode.

Mode: Lexicographic indexing

Implemented deterministic lexicographic sorting using hashes of previous transactions and output indexes for sorting transaction input data, as well as values and scriptPubKeys for sorting transaction output data;
We understand that information must remain confidential not only in the interests of consumers but also in higher orders, financial systems must be kept secret to prevent fraud. One way to address these privacy shortcomings is to randomize the order of inputs and outputs.
Lexicographic ordering is a comparison algorithm used to sort two sets based on their Cartesian order within their common superset. Lexicographic order is also often referred to as alphabetical order or dictionary order. The hashes of previous transactions (in reverse byte order) are sorted in ascending order, lexicographically.
In the case of two matching transaction hashes, the corresponding previous output indexes will be compared by their integer value in ascending order. If the previous output indexes match, the input data is considered equal.

Shuffle Mode: mixing (random indexing)

To learn more about how “shuffle mode” works, we will first analyze the mechanisms using the example of a classic transaction. Current balance Of your wallet: 100 TKEY, coins are stored at different addresses:
x1. Address-contains 10 TKEY. x2. Address-contains 20 TKEY. x3. Address-contains 30 TKEY. x4. Address-contains 15 TKEY. x5. Address-contains 25 TKEY.
Addresses in the blockchain are identifiers that you use to send cryptocurrency to another person or to receive digital currency.
In a classic transaction, if you need to send, for example, 19 TKEY — 100 TKEY will be sent to the network for “melting” coins, 19 TKEY will be sent to the Recipient, and ~80.9 TKEY will return to the newly generated address for “change” in your wallet.

https://preview.redd.it/x595qwdottx41.png?width=806&format=png&auto=webp&s=d9c2ae5620a3410ed83f7e16c018165c8ab35844
In the blockchain explorer, you will see the transaction amount in the amount of 100 TKEY, where 80.99999679 TKEY is your change, 19 TKEY is the amount you sent and 0.00000321 is the transaction fee. Thus, in the blockchain search engine, most of your balance is shown in the transaction.

How does the shuffle mode work?

Let’s look at a similar example: you have 100 TKEY on your balance, and you need to send 19 TKEY.
x1. Address-contains 10 TKEY. x2. Address-contains 20 TKEY. x3. Address-contains 30 TKEY. x4. Address-contains 15 TKEY. x5. Address-contains 25 TKEY.
You send 19 TKEY, the system analyzes all your addresses and balances on them and selects the most suitable ones for the transaction. To send 19 TKEY, the miners will be given coins with x2. Addresses, for a total of 20 TKEY. Of these, 19 TKEY will be sent to the recipient, and 0.99999679 TKEY will be returned to Your new address as change minus the transaction fee.

https://preview.redd.it/doxmqffqttx41.png?width=1400&format=png&auto=webp&s=5c99ec41363fe50cd651dc0acab05e175416006a
In the blockchain explorer, you will see the transaction amount in the amount of 20 TKEY, where 0.99999679 TKEY is Your change, 19 TKEY is the amount you sent and 0.00000321 is the transaction fee.
The shuffle mode has a cumulative effect. with each new transaction, delivery Addresses will be created and the selection of debit addresses/s that are most suitable for the transaction will change. Thus, if you store 1,000,000 TKEY in your wallet and want to send 1 TKEY to the recipient, the transaction amount will not display most of your balance but will select 1 or more addresses for the transaction.

Selecting the recovery method for each digital currency (Blockchain restore)

Now you can choose the recovery method for each currency: API + Blockchain or blockchain.
Note: This is not a syncing process, but rather the choice of a recovery method for your wallet. Syncing takes place with the blockchain — regardless of the method you choose.
https://preview.redd.it/gxsssuxrttx41.png?width=1080&format=png&auto=webp&s=cd9fe383618dda0e990e86485652ff95652a8481

What are the differences between recovery methods?

API + Blockchain

In order not to load the entire history of the blockchain, i.e. block and transaction headers, the API helps you quickly get point information about previous transactions. For example, If your transactions are located in block 67325 and block 71775, the API will indicate to the node the necessary points for restoring Your balance, which will speed up the “recovery” process.
As soon as the information is received, communication with the peers takes place and synchronization begins from the control point, then from this moment, all subsequent block loading is carried out through the blockchain. This method allows you to quickly restore Your existing wallet.
‘’+’’ Speed.
‘’-’’ The API server may fail.

Blockchain

This method loads all block headers (block headers + Merkle) starting from the BIP44 checkpoint and manually validates transactions.
‘’+’’ It always works and is decentralized. ‘’-’’ Loading the entire blockchain may take a long time.

Why do I need to switch the recovery method?

If when creating a wallet or restoring it, a notification (!) lights up in red near the selected cryptocurrency, then most likely the API has failed, so go to SettingsSecurity CenterPrivacyBlockchain Restore — switch to Blockchain. Syncing will be successful.

Selecting the address format

You can choose the address format not only for Bitcoin but also for Litecoin. Legacy, SegWit, Native SegWit. Go to SettingsManage WalletsAddress Format.

https://preview.redd.it/nqj0nwutttx41.png?width=1080&format=png&auto=webp&s=fc04b8ee8339ab27d3203ff551013cda7aa9e8db

Working at the code level

Enhanced validation of transactions and blocks in the network

Due to the increased complexity in the Tkeycoin network, we have implemented enhanced validation of the tkeycoin consensus algorithm, and this algorithm is also available for other cryptocurrencies.

What is the advantage of the enhanced validation algorithm for the user

First, the name itself speaks for itself — it increases the security of the network, and second, by implementing the function — we have accelerated the work of the TkeySpace blockchain node, the application consumes even fewer resources than before.
High complexity is converted to 3 bytes, which ensures fast code processing and the least resource consumption on your device.

Synchronization

The synchronization process has been upgraded. Node addresses are added to the local storage, and instant synchronization with nodes occurs when you log in again.

Checking for double-spending

TkeySpace eliminates “double-spending” in blockchains, which is very valuable in the Bitcoin and Litecoin networks.
For example, using another application, you may be sent a fake transaction, and the funds will eventually disappear from the network and your wallet because this feature is almost absent in most applications.
Using TkeySpace — you are 100% sure that your funds are safe and protected from fraudulent transactions in the form of “fake” transactions.

The bloom filter to check for nodes

All nodes are checked through the bloom filter. This allows you to exclude fraudulent nodes that try to connect to the network as real nodes of a particular blockchain.
In practice, this verification is not available in applications, Tkeycoin — decided to follow a new trend and change the stereotypes, so new features such as node verification using the bloom filter and double-spending verification are a kind of innovation in applications that work with cryptocurrencies.

Updating the Binance and Ethereum libraries

Updated Binance and Ethereum libraries for interaction with the TOR network.

Interface

Function — to hide the balance

This function allows you to hide the entire balance from the main screen.

Advanced currency charts and charts without authentication

Detailed market statistics are available, including volumes, both for 1 day and several years. Select the period of interest: 1 day, 7 days, 1 month, 3 months, 6 months, 1 year, 2 years.
In version 1.3.0, you can access charts without authentication. You can monitor the cryptocurrency exchange rate without even logging in to the app. If you have a pin code for logging in, when you open the app, swipe to the left and you will see a list of currencies.

https://preview.redd.it/f3thqv1wttx41.png?width=1080&format=png&auto=webp&s=1906307f7ad1fd6db47bf270ce7c57185267b1a3

News

In the market data section — in the tkeyspace added a section with current news of the cryptocurrency market.

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Blockchain Explorer for Tkeycoin

Transaction verification for Tkeycoin is now available directly in the app.

Independent Commission entry for Bitcoin

Taking into account the large volume of the Bitcoin network, we have implemented independent Commission entry — you can specify any Commission amount.
For other currencies, smart Commission calculation is enabled based on data from the network. The network independently regulates the most profitable Commission for the sender.

New digital currencies

The TkeySpace wallet supports +59 cryptocurrencies and tokens.

Cryptocurrencies

Tkeycoin (TKEY), Bitcoin (BTC), Litecoin (LTC), Ethereum (ETH), Bitcoin Cash (BCH), DASH, Binance (BNB), EOS.

Stablecoins

TrueUSD (TUSD), Tether USD (USDT), USD Coin (USDC), Gemini Dollar (GUSD), STASIS EURO (EURS), Digix Gold Token (DGX), Paxos Standard (PAX), PAX Gold (PAXG), Binance USD (BUSD), EOSDT, Prospectors Gold (PGL).

ERC-20, BEP2, and EOS tokens

Newdex (NDX), DigixDAO ERC-20 (DGD), Chainlink ERC-20 (LINK), Decentraland ERC-20 (MANA), EnjinCoin ERC-20 (ENJ), the Native Utility (NUT), 0x Protocol ERC-20 (ZRX), Aelf ERC-20 (ELF), Dawn DAO ERC-20 (AURA), Cashaaa BEP2 (CAS), Bancor ERC-20 (BNT), the Basic Attention Token ERC-20 (BAT), Golem ERC-20 (GNT), Mithril ERC-20 (MITH), MEETONE, NEXO ERC-20, Holo ERC-20 (HOT), Huobi Token ERC-20 (HT), IDEX ERC-20, IDEX Membership ERC-20 (IDXM), Bitcoin BEP2 (BTCB), Waltonchain ERC-20 (WTC), KuCoin Shares ERC-20 (KCS), Kyber Network Crystal ERC-20 (KNC), Loom Network ERC-20 (LOOM), Ripple (XRP), Everipedia (IQ), Loopring ERC-20 (LRC), Maker ERC-20 (MKR), the Status of the ERC-20 (SNT), Ankr Network BEP2 (ANKR), OmiseGO ERC-20 (OMG), ^ american English ERC-20 (^american English), Polymath ERC-20 (POLY), Populous ERC-20 (PPT), Pundi X ERC-20 (NPXS), Parser ERC-20 (REP), Revain ERC-20 (R), Binance ERC20 (BNB-ERC20), Gifto BEP2 (GTO).

Exchange of cryptocurrency

The “Limitless Crypto Exchange” tab is available for a quick transition to an unlimited exchange in 200 digital currencies — 10,000 currency pairs.

How do I update TkeySpace to version 1.3.0?

  1. Go to Google Play on your device — My apps and games — find TkeySpace in the list of apps — click Update.
  2. Go to Google Play on your device-write TkeySpace in the search — click on the app icon — Update.
After the update, you will need to restore your wallet.
submitted by tkeycoin to Tkeycoin_Official [link] [comments]

Beginner’s Guide to BitMEX

Beginner’s Guide to BitMEX

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Founded by HDR Global Trading Limited (which in turn was founded by former bankers Arthur Hayes, Samuel Reed and Ben Delo) in 2014, BitMEX is a trading platform operating around the world and registered in the Seychelles.
Meaning Bitcoin Mercantile Exchange, BitMEX is one of the largest Bitcoin trading platforms currently operating, with a daily trading volume of over 35,000 BTC and over 540,000 accesses monthly and a trading history of over $34 billion worth of Bitcoin since its inception.

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Unlike many other trading exchanges, BitMEX only accepts deposits through Bitcoin, which can then be used to purchase a variety of other cryptocurrencies. BitMEX specialises in sophisticated financial operations such as margin trading, which is trading with leverage. Like many of the exchanges that operate through cryptocurrencies, BitMEX is currently unregulated in any jurisdiction.
Visit BitMEX

How to Sign Up to BitMEX

In order to create an account on BitMEX, users first have to register with the website. Registration only requires an email address, the email address must be a genuine address as users will receive an email to confirm registration in order to verify the account. Once users are registered, there are no trading limits. Traders must be at least 18 years of age to sign up.
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However, it should be noted that BitMEX does not accept any US-based traders and will use IP checks to verify that users are not in the US. While some US users have bypassed this with the use of a VPN, it is not recommended that US individuals sign up to the BitMEX service, especially given the fact that alternative exchanges are available to service US customers that function within the US legal framework.
How to Use BitMEX
BitMEX allows users to trade cryptocurrencies against a number of fiat currencies, namely the US Dollar, the Japanese Yen and the Chinese Yuan. BitMEX allows users to trade a number of different cryptocurrencies, namely Bitcoin, Bitcoin Cash, Dash, Ethereum, Ethereum Classic, Litecoin, Monero, Ripple, Tezos and Zcash.
The trading platform on BitMEX is very intuitive and easy to use for those familiar with similar markets. However, it is not for the beginner. The interface does look a little dated when compared to newer exchanges like Binance and Kucoin’s.
Once users have signed up to the platform, they should click on Trade, and all the trading instruments will be displayed beneath.
Clicking on the particular instrument opens the orderbook, recent trades, and the order slip on the left. The order book shows three columns – the bid value for the underlying asset, the quantity of the order, and the total USD value of all orders, both short and long.
The widgets on the trading platform can be changed according to the user’s viewing preferences, allowing users to have full control on what is displayed. It also has a built in feature that provides for TradingView charting. This offers a wide range of charting tool and is considered to be an improvement on many of the offering available from many of its competitors.
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Once trades are made, all orders can be easily viewed in the trading platform interface. There are tabs where users can select their Active Orders, see the Stops that are in place, check the Orders Filled (total or partially) and the trade history. On the Active Orders and Stops tabs, traders can cancel any order, by clicking the “Cancel” button. Users also see all currently open positions, with an analysis if it is in the black or red.
BitMEX uses a method called auto-deleveraging which BitMEX uses to ensure that liquidated positions are able to be closed even in a volatile market. Auto-deleveraging means that if a position bankrupts without available liquidity, the positive side of the position deleverages, in order of profitability and leverage, the highest leveraged position first in queue. Traders are always shown where they sit in the auto-deleveraging queue, if such is needed.
Although the BitMEX platform is optimized for mobile, it only has an Android app (which is not official). There is no iOS app available at present. However, it is recommended that users use it on the desktop if possible.
BitMEX offers a variety of order types for users:
  • Limit Order (the order is fulfilled if the given price is achieved);
  • Market Order (the order is executed at current market price);
  • Stop Limit Order (like a stop order, but allows users to set the price of the Order once the Stop Price is triggered);
  • Stop Market Order (this is a stop order that does not enter the order book, remain unseen until the market reaches the trigger);
  • Trailing Stop Order (it is similar to a Stop Market order, but here users set a trailing value that is used to place the market order);
  • Take Profit Limit Order (this can be used, similarly to a Stop Order, to set a target price on a position. In this case, it is in respect of making gains, rather than cutting losses);
  • Take Profit Market Order (same as the previous type, but in this case, the order triggered will be a market order, and not a limit one)
The exchange offers margin trading in all of the cryptocurrencies displayed on the website. It also offers to trade with futures and derivatives – swaps.

Futures and Swaps

A futures contract is an agreement to buy or sell a given asset in the future at a predetermined price. On BitMEX, users can leverage up to 100x on certain contracts.
Perpetual swaps are similar to futures, except that there is no expiry date for them and no settlement. Additionally, they trade close to the underlying reference Index Price, unlike futures, which may diverge substantially from the Index Price.
BitMEX also offers Binary series contracts, which are prediction-based contracts which can only settle at either 0 or 100. In essence, the Binary series contracts are a more complicated way of making a bet on a given event.
The only Binary series betting instrument currently available is related to the next 1mb block on the Bitcoin blockchain. Binary series contracts are traded with no leverage, a 0% maker fee, a 0.25% taker fee and 0.25% settlement fee.

Bitmex Leverage

BitMEX allows its traders to leverage their position on the platform. Leverage is the ability to place orders that are bigger than the users’ existing balance. This could lead to a higher profit in comparison when placing an order with only the wallet balance. Trading in such conditions is called “Margin Trading.”
There are two types of Margin Trading: Isolated and Cross-Margin. The former allows the user to select the amount of money in their wallet that should be used to hold their position after an order is placed. However, the latter provides that all of the money in the users’ wallet can be used to hold their position, and therefore should be treated with extreme caution.
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The BitMEX platform allows users to set their leverage level by using the leverage slider. A maximum leverage of 1:100 is available (on Bitcoin and Bitcoin Cash). This is quite a high level of leverage for cryptocurrencies, with the average offered by other exchanges rarely exceeding 1:20.

BitMEX Fees

For traditional futures trading, BitMEX has a straightforward fee schedule. As noted, in terms of leverage offered, BitMEX offers up to 100% leverage, with the amount off leverage varying from product to product.
However, it should be noted that trading at the highest leverages is sophisticated and is intended for professional investors that are familiar with speculative trading. The fees and leverage are as follows:
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However, there are additional fees for hidden / iceberg orders. A hidden order pays the taker fee until the entire hidden quantity is completely executed. Then, the order will become normal, and the user will receive the maker rebate for the non-hidden amount.

Deposits and Withdrawals

BitMEX does not charge fees on deposits or withdrawals. However, when withdrawing Bitcoin, the minimum Network fee is based on blockchain load. The only costs therefore are those of the banks or the cryptocurrency networks.
As noted previously, BitMEX only accepts deposits in Bitcoin and therefore Bitcoin serves as collateral on trading contracts, regardless of whether or not the trade involves Bitcoin.
The minimum deposit is 0.001 BTC. There are no limits on withdrawals, but withdrawals can also be in Bitcoin only. To make a withdrawal, all that users need to do is insert the amount to withdraw and the wallet address to complete the transfer.
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Deposits can be made 24/7 but withdrawals are processed by hand at a recurring time once per day. The hand processed withdrawals are intended to increase the security levels of users’ funds by providing extra time (and email notice) to cancel any fraudulent withdrawal requests, as well as bypassing the use of automated systems & hot wallets which may be more prone to compromise.

Supported Currencies

BitMEX operates as a crypto to crypto exchange and makes use of a Bitcoin-in/Bitcoin-out structure. Therefore, platform users are currently unable to use fiat currencies for any payments or transfers, however, a plus side of this is that there are no limits for trading and the exchange incorporates trading pairs linked to the US Dollar (XBT), Japanese Yen (XBJ), and Chinese Yuan (XBC).
BitMEX supports the following cryptocurrencies:
  • Bitcoin (XBT)
  • Bitcoin Cash (BCH)
  • Ethereum (ETH)
  • Ethereum Classic (ETC)
  • Litecoin (LTC)
  • Ripple Token (XRP)
  • Monero (XMR)
  • Dash (DASH)
  • Zcash (ZEC)
  • Cardano (ADA)
  • Tron (TRX)
  • EOS Token (EOS)
BitMEX also offers leverage options on the following coins:
  • 5x: Zcash (ZEC)
  • 20x : Ripple (XRP),Bitcoin Cash (BCH), Cardano (ADA), EOS Token (EOS), Tron (TRX)
  • 25x: Monero (XMR)
  • 33x: Litecoin (LTC)
  • 50x: Ethereum (ETH)
  • 100x: Bitcoin (XBT), Bitcoin / Yen (XBJ), Bitcoin / Yuan (XBC)

Trading Technologies International Partnership

HDR Global Trading, the company which owns BitMEX, has recently announced a partnership with Trading Technologies International, Inc. (TT), a leading international high-performance trading software provider.
The TT platform is designed specifically for professional traders, brokers, and market-access providers, and incorporates a wide variety of trading tools and analytical indicators that allow even the most advanced traders to customize the software to suit their unique trading styles. The TT platform also provides traders with global market access and trade execution through its privately managed infrastructure and the partnership will see BitMEX users gaining access to the trading tools on all BitMEX products, including the popular XBT/USD Perpetual Swap pairing.
https://preview.redd.it/qcqunaby3cc41.png?width=672&format=png&auto=webp&s=b77b45ac2b44a9af30a4985e3d9dbafc9bbdb77c

The BitMEX Insurance Fund

The ability to trade on leverage is one of the exchange’s main selling points and offering leverage and providing the opportunity for traders to trade against each other may result in a situation where the winners do not receive all of their expected profits. As a result of the amounts of leverage involved, it’s possible that the losers may not have enough margin in their positions to pay the winners.
Traditional exchanges like the Chicago Mercantile Exchange (CME) offset this problem by utilizing multiple layers of protection and cryptocurrency trading platforms offering leverage cannot currently match the levels of protection provided to winning traders.
In addition, cryptocurrency exchanges offering leveraged trades propose a capped downside and unlimited upside on a highly volatile asset with the caveat being that on occasion, there may not be enough funds in the system to pay out the winners.
To help solve this problem, BitMEX has developed an insurance fund system, and when a trader has an open leveraged position, their position is forcefully closed or liquidated when their maintenance margin is too low.
Here, a trader’s profit and loss does not reflect the actual price their position was closed on the market, and with BitMEX when a trader is liquidated, their equity associated with the position drops down to zero.
In the following example, the trader has taken a 100x long position. In the event that the mark price of Bitcoin falls to $3,980 (by 0.5%), then the position gets liquidated with the 100 Bitcoin position needing to be sold on the market.
This means that it does not matter what price this trade executes at, namely if it’s $3,995 or $3,000, as from the view of the liquidated trader, regardless of the price, they lose all the equity they had in their position, and lose the entire one Bitcoin.
https://preview.redd.it/wel3rka04cc41.png?width=669&format=png&auto=webp&s=3f93dac2d3b40aa842d281384113d2e26f25947e
Assuming there is a fully liquid market, the bid/ask spread should be tighter than the maintenance margin. Here, liquidations manifest as contributions to the insurance fund (e.g. if the maintenance margin is 50bps, but the market is 1bp wide), and the insurance fund should rise by close to the same amount as the maintenance margin when a position is liquidated. In this scenario, as long as healthy liquid markets persist, the insurance fund should continue its steady growth.
The following graphs further illustrate the example, and in the first chart, market conditions are healthy with a narrow bid/ask spread (just $2) at the time of liquidation. Here, the closing trade occurs at a higher price than the bankruptcy price (the price where the margin balance is zero) and the insurance fund benefits.
Illustrative example of an insurance contribution – Long 100x with 1 BTC collateral
https://preview.redd.it/is89ep924cc41.png?width=699&format=png&auto=webp&s=f0419c68fe88703e594c121b5b742c963c7e2229
(Note: The above illustration is based on opening a 100x long position at $4,000 per BTC and 1 Bitcoin of collateral. The illustration is an oversimplification and ignores factors such as fees and other adjustments.
The bid and offer prices represent the state of the order book at the time of liquidation. The closing trade price is $3,978, representing $1 of slippage compared to the $3,979 bid price at the time of liquidation.)
The second chart shows a wide bid/ask spread at the time of liquidation, here, the closing trade takes place at a lower price than the bankruptcy price, and the insurance fund is used to make sure that winning traders receive their expected profits.
This works to stabilize the potential for returns as there is no guarantee that healthy market conditions can continue, especially during periods of heightened price volatility. During these periods, it’s actually possible that the insurance fund can be used up than it is built up.
Illustrative example of an insurance depletion – Long 100x with 1 BTC collateral
https://preview.redd.it/vb4mj3n54cc41.png?width=707&format=png&auto=webp&s=0c63b7c99ae1c114d8e3b947fb490e9144dfe61b
(Notes: The above illustration is based on opening a 100x long position at $4,000 per BTC and 1 Bitcoin of collateral. The illustration is an oversimplification and ignores factors such as fees and other adjustments.
The bid and offer prices represent the state of the order book at the time of liquidation. The closing trade price is $3,800, representing $20 of slippage compared to the $3,820 bid price at the time of liquidation.)
The exchange declared in February 2019, that the BitMEX insurance fund retained close to 21,000 Bitcoin (around $70 million based on Bitcoin spot prices at the time).
This figure represents just 0.007% of BitMEX’s notional annual trading volume, which has been quoted as being approximately $1 trillion. This is higher than the insurance funds as a proportion of trading volume of the CME, and therefore, winning traders on BitMEX are exposed to much larger risks than CME traders as:
  • BitMEX does not have clearing members with large balance sheets and traders are directly exposed to each other.
  • BitMEX does not demand payments from traders with negative account balances.
  • The underlying instruments on BitMEX are more volatile than the more traditional instruments available on CME.
Therefore, with the insurance fund remaining capitalized, the system effectively with participants who get liquidated paying for liquidations, or a losers pay for losers mechanism.
This system may appear controversial as first, though some may argue that there is a degree of uniformity to it. It’s also worth noting that the exchange also makes use of Auto Deleveraging which means that on occasion, leveraged positions in profit can still be reduced during certain time periods if a liquidated order cannot be executed in the market.
More adventurous traders should note that while the insurance fund holds 21,000 Bitcoin, worth approximately 0.1% of the total Bitcoin supply, BitMEX still doesn’t offer the same level of guarantees to winning traders that are provided by more traditional leveraged trading platforms.
Given the inherent volatility of the cryptocurrency market, there remains some possibility that the fund gets drained down to zero despite its current size. This may result in more successful traders lacking confidence in the platform and choosing to limit their exposure in the event of BitMEX being unable to compensate winning traders.

How suitable is BitMEX for Beginners?

BitMEX generates high Bitcoin trading levels, and also attracts good levels of volume across other crypto-to-crypto transfers. This helps to maintain a buzz around the exchange, and BitMEX also employs relatively low trading fees, and is available round the world (except to US inhabitants).
This helps to attract the attention of people new to the process of trading on leverage and when getting started on the platform there are 5 main navigation Tabs to get used to:
  • **Trade:**The trading dashboard of BitMEX. This tab allows you to select your preferred trading instrument, and choose leverage, as well as place and cancel orders. You can also see your position information and view key information in the contract details.
  • **Account:**Here, all your account information is displayed including available Bitcoin margin balances, deposits and withdrawals, and trade history.
  • **Contracts:**This tab covers further instrument information including funding history, contract sizes; leverage offered expiry, underlying reference Price Index data, and other key features.
  • **References:**This resource centre allows you to learn about futures, perpetual contracts, position marking, and liquidation.
  • **API:**From here you can set up an API connection with BitMEX, and utilize the REST API and WebSocket API.
BitMEX also employs 24/7 customer support and the team can also be contacted on their Twitter and Reddit accounts.
In addition, BitMEX provides a variety of educational resources including an FAQ section, Futures guides, Perpetual Contracts guides, and further resources in the “References” account tab.
For users looking for more in depth analysis, the BitMEX blog produces high level descriptions of a number of subjects and has garnered a good reputation among the cryptocurrency community.
Most importantly, the exchange also maintains a testnet platform, built on top of testnet Bitcoin, which allows anyone to try out programs and strategies before moving on to the live exchange.
This is crucial as despite the wealth of resources available, BitMEX is not really suitable for beginners, and margin trading, futures contracts and swaps are best left to experienced, professional or institutional traders.
Margin trading and choosing to engage in leveraged activity are risky processes and even more advanced traders can describe the process as a high risk and high reward “game”. New entrants to the sector should spend a considerable amount of time learning about margin trading and testing out strategies before considering whether to open a live account.

Is BitMEX Safe?

BitMEX is widely considered to have strong levels of security. The platform uses multi-signature deposits and withdrawal schemes which can only be used by BitMEX partners. BitMEX also utilises Amazon Web Services to protect the servers with text messages and two-factor authentication, as well as hardware tokens.
BitMEX also has a system for risk checks, which requires that the sum of all account holdings on the website must be zero. If it’s not, all trading is immediately halted. As noted previously, withdrawals are all individually hand-checked by employees, and private keys are never stored in the cloud. Deposit addresses are externally verified to make sure that they contain matching keys. If they do not, there is an immediate system shutdown.
https://preview.redd.it/t04qs3484cc41.jpg?width=808&format=pjpg&auto=webp&s=a3b106cbc9116713dcdd5e908c00b555fd704ee6
In addition, the BitMEX trading platform is written in kdb+, a database and toolset popular amongst major banks in high frequency trading applications. The BitMEX engine appears to be faster and more reliable than some of its competitors, such as Poloniex and Bittrex.
They have email notifications, and PGP encryption is used for all communication.
The exchange hasn’t been hacked in the past.

How Secure is the platform?

As previously mentioned, BitMEX is considered to be a safe exchange and incorporates a number of security protocols that are becoming standard among the sector’s leading exchanges. In addition to making use of Amazon Web Services’ cloud security, all the exchange’s systems can only be accessed after passing through multiple forms of authentication, and individual systems are only able to communicate with each other across approved and monitored channels.
Communication is also further secured as the exchange provides optional PGP encryption for all automated emails, and users can insert their PGP public key into the form inside their accounts.
Once set up, BitMEX will encrypt and sign all the automated emails sent by you or to your account by the [[email protected]](mailto:[email protected]) email address. Users can also initiate secure conversations with the support team by using the email address and public key on the Technical Contact, and the team have made their automated system’s PGP key available for verification in their Security Section.
The platform’s trading engine is written in kdb+, a database and toolset used by leading financial institutions in high-frequency trading applications, and the speed and reliability of the engine is also used to perform a full risk check after every order placement, trade, settlement, deposit, and withdrawal.
All accounts in the system must consistently sum to zero, and if this does not happen then trading on the platform is immediately halted for all users.
With regards to wallet security, BitMEX makes use of a multisignature deposit and withdrawal scheme, and all exchange addresses are multisignature by default with all storage being kept offline. Private keys are not stored on any cloud servers and deep cold storage is used for the majority of funds.
Furthermore, all deposit addresses sent by the BitMEX system are verified by an external service that works to ensure that they contain the keys controlled by the founders, and in the event that the public keys differ, the system is immediately shut down and trading halted. The exchange’s security practices also see that every withdrawal is audited by hand by a minimum of two employees before being sent out.

BitMEX Customer Support

The trading platform has a 24/7 support on multiple channels, including email, ticket systems and social media. The typical response time from the customer support team is about one hour, and feedback on the customer support generally suggest that the customer service responses are helpful and are not restricted to automated responses.
https://preview.redd.it/8k81zl0a4cc41.jpg?width=808&format=pjpg&auto=webp&s=e30e5b7ca93d2931f49e2dc84025f2fda386eab1
The BitMEX also offers a knowledge base and FAQs which, although they are not necessarily always helpful, may assist and direct users towards the necessary channels to obtain assistance.
BitMEX also offers trading guides which can be accessed here

Conclusion

There would appear to be few complaints online about BitMEX, with most issues relating to technical matters or about the complexities of using the website. Older complaints also appeared to include issues relating to low liquidity, but this no longer appears to be an issue.
BitMEX is clearly not a platform that is not intended for the amateur investor. The interface is complex and therefore it can be very difficult for users to get used to the platform and to even navigate the website.
However, the platform does provide a wide range of tools and once users have experience of the platform they will appreciate the wide range of information that the platform provides.
Visit BitMEX
submitted by bitmex_register to u/bitmex_register [link] [comments]

Elaborating on Datadash's 50k BTC Prediction: Why We Endorse the Call

As originally published via CoinLive
I am the Co-Founder at CoinLive. Prior to founding Coinlive.io, my area of expertise was inter-market analysis. I came across Datadash 50k BTC prediction this week, and I must take my hats off to what I believe is an excellent interpretation of the inter-connectivity of various markets.
At your own convenience, you can find a sample of Intermarket analysis I've written in the past before immersing myself into cryptos full-time.
Gold inter-market: 'Out of sync' with VIX, takes lead from USD/JPY
USD/JPY inter-market: Watch divergence US-Japan yield spread
EUUSD intermarket: US yields collapse amid supply environment
Inter-market analysis: Risk back in vogue, but for how long?
USD/JPY intermarket: Bulls need higher adj in 10-y US-JP spread
The purpose of this article is to dive deeper into the factors Datadash presents in his video and how they can help us draw certain conclusions about the potential flows of capital into crypto markets and the need that will exist for a BTC ETF.
Before I do so, as a brief explainer, let's touch on what exactly Intermarket analysis refers to:
Intermarket analysis is the global interconnectivity between equities, bonds, currencies, commodities, and any other asset class; Global markets are an ever-evolving discounting and constant valuation mechanism and by studying their interconnectivity, we are much better positioned to explain and elaborate on why certain moves occur, future directions and gain insights on potential misalignments that the market may not have picked up on yet or might be ignoring/manipulating.
While such interconnectivity has proven to be quite limiting when it comes to the value one can extract from analyzing traditional financial assets and the crypto market, Datadash has eloquently been able to build a hypothesis, which as an Intermarket analyst, I consider very valid, and that matches up my own views. Nicolas Merten constructs a scenario which leads him to believe that a Bitcoin ETF is coming. Let's explore this hypothesis.
I will attempt to summarize and provide further clarity on why the current events in traditional asset classes, as described by Datadash, will inevitably result in a Bitcoin ETF. Make no mistake, Datadash's call for Bitcoin at 50k by the end of 2018 will be well justified once a BTC ETF is approved. While the timing is the most challenging part t get right, the end result won't vary.
If one wishes to learn more about my personal views on why a BTC ETF is such a big deal, I encourage you to read my article from late March this year.
Don't Be Misled by Low Liquidity/Volume - Fundamentals Never Stronger
The first point Nicholas Merten makes is that despite depressed volume levels, the fundamentals are very sound. That, I must say, is a point I couldn't agree more. In fact, I recently wrote an article titled The Paradox: Bitcoin Keeps Selling as Intrinsic Value Set to Explode where I state "the latest developments in Bitcoin's technology makes it paradoxically an ever increasingly interesting investment proposition the cheaper it gets."
However, no article better defines where we stand in terms of fundamentals than the one I wrote back on May 15th titled Find Out Why Institutions Will Flood the Bitcoin Market, where I look at the ever-growing list of evidence that shows why a new type of investors, the institutional ones, looks set to enter the market in mass.
Nicholas believes that based on the supply of Bitcoin, the market capitalization can reach about $800b. He makes a case that with the fundamentals in bitcoin much stronger, it wouldn't be that hard to envision the market cap more than double from its most recent all-time high of more than $300b.
Interest Rates Set to Rise Further
First of all, one of the most immediate implications of higher rates is the increased difficulty to bear the costs by borrowers, which leads Nicholas to believe that banks the likes of Deutsche Bank will face a tough environment going forward. The CEO of the giant German lender has actually warned that second-quarter results would reflect a “revenue environment [that] remains challenging."
Nicholas refers to the historical chart of Eurodollar LIBOR rates as illustrated below to strengthen the case that interest rates are set to follow an upward trajectory in the years to come as Central Banks continue to normalize monetary policies after a decade since the global financial crisis. I'd say, that is a correct assumption, although one must take into account the Italian crisis to be aware that a delay in higher European rates is a real possibility now.
![](https://coinlive.io/ckeditor_assets/pictures/947/content_2018-05-30_1100.png)
Let's look at the following combinations: Fed Fund Rate Contract (green), German 2-year bond yields (black) and Italy's 10-year bond yield (blue) to help us clarify what's the outlook for interest rates both in Europe and the United States in the foreseeable future. The chart suggests that while the Federal Reserve remains on track to keep increasing interest rates at a gradual pace, there has been a sudden change in the outlook for European rates in the short-end of the curve.
While the European Central Bank is no longer endorsing proactive policies as part of its long-standing QE narrative, President Mario Draghi is still not ready to communicate an exit strategy to its unconventional stimulus program due to protectionism threats in the euro-area, with Italy the latest nightmare episode.
Until such major step is taken in the form of a formal QE conclusion, interest rates in the European Union will remain depressed; the latest drastic spike in Italy's benchmark bond yield to default levels is pre-emptive of lower rates for longer, an environment that on one hand may benefit the likes of Deutsche Bank on lower borrowing costs, but on the other hand, sets in motion a bigger headache as risk aversion is set to dominate financial markets, which leads to worse financial consequences such as loss of confidence and hence in equity valuations.
![](https://coinlive.io/ckeditor_assets/pictures/948/content_2018-05-30_1113.png)
Deutsche Bank - End of the Road?
Nicholas argues that as part of the re-restructuring process in Deutsche Bank, they will be facing a much more challenging environment as lending becomes more difficult on higher interest rates. At CoinLive, we still believe this to be a logical scenario to expect, even if a delay happens as the ECB tries to deal with the Italian political crisis which once again raises the question of whether or not Italy should be part of the EU. Reference to an article by Zerohedge is given, where it states:
"One day after the WSJ reported that the biggest German bank is set to "decimate" its workforce, firing 10,000 workers or one in ten, this morning Deutsche Bank confirmed plans to cut thousands of jobs as part of new CEO Christian Sewing's restructuring and cost-cutting effort. The German bank said its headcount would fall “well below” 90,000, from just over 97,000. But the biggest gut punch to employee morale is that the bank would reduce headcount in its equities sales and trading business by about 25%."
There is an undeniably ongoing phenomenon of a migration in job positions from traditional financial markets into blockchain, which as we have reported in the past, it appears to be a logical and rational step to be taken, especially in light of the new revenue streams the blockchain sector has to offer. Proof of that is the fact that Binance, a crypto exchange with around 200 employees and less than 1 year of operations has overcome Deutsche Bank, in total profits. What this communicates is that the opportunities to grow an institution’s revenue stream are formidable once they decide to integrate cryptocurrencies into their business models.
One can find an illustration of Deutsche Bank's free-fall in prices below:
![](https://coinlive.io/ckeditor_assets/pictures/946/content_2018-05-30_1052.png)
Nicholas takes notes of a chart in which one can clearly notice a worrying trend for Italian debt. "Just about every other major investor type has become a net seller (to the ECB) or a non-buyer of BTPs over the last couple of years. Said differently, for well over a year, the only marginal buyer of Italian bonds has been the ECB!", the team of Economists at Citi explained. One can find the article via ZeroHedge here.
![](https://coinlive.io/ckeditor_assets/pictures/953/content_2018-05-30_1451.png)
Equities & Housing to Suffer the Consequences
Nicholas notes that trillions of dollars need to exit these artificially-inflated equity markets. He even mentions a legendary investor such as George Soros, who has recently warned that the world could be on the brink of another devastating financial crisis, on lingering debt concerns in Europe and a strengthening US dollar, as a destabilizing factor for both the US's emerging- and developed-market rivals.
Ray Dalio, another legend in the investing world and Founder of Bridgewater Associates, the world’s largest hedge fund, "has ramped up its short positions in European equities in recent weeks, bringing their total value to an estimated $22 billion", MarketWatch reports.
Nicholas extracts a chart by John Del Vecchio at lmtr.com where it illustrates the ratio between stocks and commodities at the lowest in over 50 years.
As the author states:
"I like to look for extremes in the markets. Extremes often pinpoint areas where returns can be higher and risk lower than in other time periods. Take the relationship between commodities and stocks. The chart below shows that commodities haven not been cheaper than stocks in a generation. We often hear this time it is different” to justify what’s going on in the world. But, one thing that never changes is human nature. People push markets to extremes. Then they revert. "
![](https://coinlive.io/ckeditor_assets/pictures/954/content_2018-05-30_1459.png)
Bitcoin ETF the Holy Grail for a Cyclical Multi-Year Bull Run
It is precisely from this last chart above that leads Nicholas to believe we are on the verge of a resurgence in commodity prices. Not only that but amid the need of all this capital to exit stocks and to a certain extent risky bonds (Italian), a new commodity-based digital currency ETF based on Bitcoin will emerge in 2018.
The author of Datadash highlights the consideration to launching a Bitcoin ETF by the SEC. At CoinLive, our reporting of the subject can be found below:
"Back in April, it was reported that the US Securities and Exchange Commission (SEC) has put back on the table two Bitcoin ETF proposals, according to public documents. The agency is under formal proceedings to approve a rule change that would allow NYSE Arca to list two exchange-traded funds (ETFs) proposed by fund provider ProShares. The introduction of an ETF would make Bitcoin available to a much wider share of market participants, with the ability to directly buy the asset at the click of a button, essentially simplifying the current complexity that involves having to deal with all the cumbersome steps currently in place."
Nicholas refers to the support the Bitcoin ETF has been receiving by the Cboe president Chris Concannon, which is a major positive development. CoinLive reported on the story back in late March, noting that "a Bitcoin ETF will without a doubt open the floodgates to an enormous tsunami of fresh capital entering the space, which based on the latest hints by Concannon, the willingness to keep pushing for it remains unabated as the evolution of digital assets keeps its course."
It has been for quite some time CoinLive's conviction, now supported by no other than Nicholas Merten from Datadash, that over the next 6 months, markets will start factoring in the event of the year, that is, the approval of a Bitcoin ETF that will serve as a alternative vehicle to accommodate the massive flows of capital leaving some of the traditional asset classes. As Nicholas suggests, the SEC will have little choice but to provide alternative investments.
Bitcoin as a Hedge to Lower Portfolios' Volatility
Last but not least, crypto assets such as Bitcoin and the likes have an almost non-existent correlation to other traditional assets such as stocks, bonds, and commodities, which makes for a very attractive and broadly-applicable diversification strategy for the professional money as it reduces one’s portfolio volatility. The moment a Bitcoin ETF is confirmed, expect the non-correlation element of Bitcoin as a major driving force to attract further capital.
Anyone Can Be Wrong Datadash, But You Won't be Wrong Alone
Having analyzed the hypothesis by Nicholas Merten, at CoinLive we believe that the conclusion reached, that is, the creation of a Bitcoin ETF that will provide shelter to a tsunami of capital motivated by the diversification and store of value appeal of Bitcoin, is the next logical step. As per the timing of it, we also anticipate, as Nicholas notes, that it will most likely be subject to the price action in traditional assets. Should equities and credit markets hold steady, it may result in a potential delay, whereas disruption in the capital market may see the need for a BTC ETF accelerate. Either scenario, we will conclude with a quote we wrote back in March.
"It appears as though an ETF on Bitcoin is moving from a state of "If" to "When."
Datadash is certainly not alone on his 50k call. BitMEX CEO Arthur Hayes appears to think along the same line.
On behalf of the CoinLive Team, we want to thank Nicholas Merten at Datadash for such enlightening insights.
submitted by Ivo333 to BitcoinMarkets [link] [comments]

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