Tag: Exchange

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Crypto Videos

Binance Confirms Crypto Debit Cards Are Shipping Out! Get Yours!

UPDATE – Binance Confirms: Crypto Debit Cards Now Shipping to Europe Binance has confirmed that the shipping of its crypto debit cards to European countries following a tweet from Changpeng Zhao, the CEO Binance. Zhao, also known as CZ, posted a tweet announcing that Binance has begun with shipping a limited quantity of Binance crypto cards […]

UPDATE – Binance Confirms: Crypto Debit Cards Now Shipping to Europe Binance has confirmed that the shipping of its crypto debit cards to European countries following a tweet from Changpeng Zhao, the CEO Binance. Zhao, also known as CZ, posted a tweet announcing that Binance has begun with shipping a limited quantity of Binance crypto cards […]

UPDATE – Binance Confirms: Crypto Debit Cards Now Shipping to Europe

Binance has confirmed that the shipping of its crypto debit cards to European countries following a tweet from Changpeng Zhao, the CEO Binance. Zhao, also known as CZ, posted a tweet announcing that Binance has begun with shipping a limited quantity of Binance crypto cards on July 24. He added that the cards are, for the time being, only being shipped to users in the European Economic Area.
CZ’s social media post regarding the card shipments.


While most companies would issue a press release boasting about the card shipments, CZ did this in quite an unorthodox way: by tweeting the news out unofficially on July 25.
“They started shipping in limited quantities as of yesterday. That’s what I heard,” the Binance exchange CEO said, referring to the Binance Card.
Binance made an announcement regarding the issuance of the card in April 2020, right after the company’s acquisition of Swipe, a company specializing in digital asset debit cards.
Binance future crypto card plans


The crypto exchange platform giant noted that the card would soon expand its reach out of just Europe. A Binance representative confirmed that the Binance Card would be available to order in the UK shortly.
The representative did not give any specific details on the card’s geographic expansion, but he did confirm that compatibility for additional countries will come as time passes.
While most businesses struggled during the worldwide economic uncertainty, Binance continues its growth in 2020, with its crypto debit card holding as one area of expansion.

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Crypto Guides

What should we know about DEXs & its benefits?

Introduction A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts. These exchanges are hosted on a collected […]

Introduction A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts. These exchanges are hosted on a collected […]

Introduction

A decentralized exchange or DEX is referred to as a platform that eliminates the middlemen and allows traders to trade with each other directly. This direct approach allows traders to control their funds instead of giving them to exchange providers where trades are performed via smart contracts.

These exchanges are hosted on a collected ecosystem of distributed nodes. This not only reduces the hacking risk but also addresses the problem of downtime that limits the trading ability. These exchanges are designed to extend an open, transparent network that makes crypto trading accessible to all.

What Makes DEX Different from Centralized Exchanges?

A Centralized exchange is also an online platform where people can buy and sell digital currency, but they use a third-party to authenticate and execute the transactions. This needs the buyers and sellers to entrust their funds to exchanges and allow them to safely complete the transactions.

These exchanges are known to be easy to use and enable traders to buy digital currencies with cryptocurrencies or fiat. They offer a streamlined entry point to the market and cover the majority of cryptocurrency trading.

Benefits of DEX

Following are the reasons we should think about trading in decentralized exchanges:

Control

In centralized exchanges, traders do not tend to have full control over their funds, limiting the trading potentials. Recently, the event known as Proof of Keys was run by centralized exchanges to ensure that exchanges could generate more profits on deposits, the same way a bank works.

This limited the users’ rights to withdraw all their funds in a single day.  The open nature of DEXs implies that our money remains in our control. Users get to withdraw their amount whenever they intend to.

Security

Centralized exchanges collect a massive amount of money from investors. This makes these exchanges the prime target of cybercriminals. Bitstamp and popular exchange based on Slovenia was hacked in 2015.

The hackers got access to the hot wallet and stole 19,000 Bitcoins, which was worth $5 million. And with the increasing number of trading in cryptocurrencies, centralized exchanges are becoming more vulnerable to hackers. Decentralized exchanges offer more security and, over the years, have become more common choices for crypto trading.

Privacy

Centralized exchanges are categorized as MSPs or Money Service Providers. This implies that users have to undergo certain anti-money laundering (AML) and Know-your-customer (KYC) processes. But people are often resistant to providing their personal information to third parties. This is because they end up having no control over what will happen to the data.

Decentralized exchanges, on the other hand, are not controlled by a central authority. Therefore, we do not need to register other than having a valid wallet address. Decentralized exchanges still remain a rather new concept in this ecosystem. But traders are rapidly comprehending its advantages over centralized exchanges.

Bottom line

Many new DEXs are coming in the market with better features, security options, and ease of use. When assessing these platforms, ensure to consider important factors such as security features, trading volume, currencies available, transaction fees, sign-up process, etc.

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Crypto Guides

What Should You Know About Cryptoeconomics?

Introduction

Introduction

Introduction

Cryptoeconomics is a gentle combination of both cryptography and economics, i.e. incentives, as the name suggests. Cryptoeconomics ensures the decentralized peer to peer (P2P) network is viable and dependable for the proposed transactions on a P2P network. A general misconception when people come across the word Cryptoeconomics is that it is a field in economics, but it isn’t true. The use of cryptography and economic incentives to run a decentralized network without malicious attacks as it isn’t governed by anyone is Cryptoeconomics.

Why Cryptoeconomics?

The P2P networks are not new with the invention of blockchain and cryptocurrencies in our lives. Torrents sites have been using decentralized P2P networks for decades to share files. The general principle is that whenever you download a file from torrents, you are supposed to seed a file which can be useful for anyone else to download. In general, that is how we are creating content in the torrents for others to download.

This is not hard and fast rule but depends on the honor code. Human Beings are, in general, not honorary; hence most of the people don’t even know that a file should be seeded in return for a download, and hence the system has been a big failure. Hence incentives have been introduced in the cryptocurrency platforms, including cryptographic has functions for security purposes.

How does it work?

Let us see how Cryptoeconomics work using the example of Bitcoin. In 2008 bitcoin white paper was released, showing a first-ever way to use Cryptoeconomics with a practical and live example by minting a bitcoin by January 2009. Not only does the incentive concept evolved, but Bitcoin successfully overcomes the concept of the Byzantine Generals problem to create a perfect consensus mechanism called Proof of Work. Let us see in detail how cryptography and economics play a role in the bitcoin platform.

Properties of Bitcoin that have come due to cryptographic hash functions

₿ Bitcoin works on blockchain technology, which is a continuous chain of blocks linked together with cryptographic hash functions.

₿ Each block contains a predefined number of transactions with a hash of all the transactions combined.

₿ The platform is immutable, i.e., already added, and sealed blocks are not subject to any change, but new blocks can be added.

₿ Only valid transactions are allowed and added to a block using a consensus mechanism; in the case of bitcoin, it is PoW.

₿ The blockchain is accessible by anyone in the world, as this is a permissionless system.

₿ If a high transaction fee is paid, the transaction can be verified and committed to the blockchain quickly. We had seen many examples in 2017 when the bitcoin price zoomed to be highest ever.

₿ It should be easy to retrieve information on any transaction confirmed in the blockchain. This is possible using the concept of the Merkle tree.

Some of the main functions which run the bitcoin blockchain platform are

  • Hashing
  • Digital Signatures
  • Mining
  • Proof of Work

Economics

As we discussed before, the fundamental difference between blockchain P2P networks and other P2P networks is the incentive model. For getting any work done, the work should be rewarded using appropriate incentives as motivation. At the same time, the tone should be punished if the work is not adequately done or done in a malicious way to create a loss in the network.

How are the participants rewarded in the network?

  • The participants are paid in native cryptocurrency of the network for actively participating in running the network and confirming the transactions as required.
  • The most recent winner of the block is incentivized with local cryptocurrency. Some privileges like what transactions should be added in the block and charge transaction fees to add the transaction in the block kind of decision-making rights are also given.
  • Simultaneously, wrong participants are fined, or their decision-making rights are snatched away as required.

Now a question might be raised like how does cryptocurrency have a value? The answer is simple: how a fiat currency or gold has value, supply, and demand. A whole lot of other factors like the network integrity, number of coins in circulation, is the network affected by a hack recently, history and purpose of the coin in the first place, and a lot of stuff. To determine all these parameters and how the miners maintain their integrity without being malicious is based on the concept of Game Theory and Nash Equilibrium, which we will be delving into in our further articles.

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Crypto Videos

eToro Platform Review Part 3 – Copy Trading Pros!

https://youtu.be/HTq3z2brk7k

https://youtu.be/HTq3z2brk7k

eToro platform review – part 3/3

The last part of the eToro platform review will cover the social aspect of the platform as well as deposit and withdrawal methods.

eToro usability

eToro offers some essential features that make life much easier for novice traders. The platform provides a Virtual Portfolio, which basically is a ‘demo mode’ that lets users play a game of trading without actually trading and without staking any real money. This mode allows you to buy as much ‘virtual’ Bitcoin or any other crypto as you like and watch how each cryptocurrency performs. This is also a great way to test trading strategies.

eToro also provides a feature called copy trading. This feature is excellent for traders that aren’t confident in their ability to select winning trades consistently. This feature allows you to copy the best-performing traders in any asset market. You choose the trade amount, and the platform will mirror every single action the trader takes. Users, however, can make adjustments such as copying only new trades and not all currently open positions.

The layout of eToro’s platform is user-friendly, easy to navigate, and suited for casual investors. The control panel is located on the left-hand side of the screen, while the right-hand side shows charts, data, as well as profiles you’ll need to trade properly. eToro’s also has a mobile application mobile that allows you to do everything you can do on your desktop. The platform app is available for both Android and iOS devices.

eToro social trading

eToro’s copy trading, as mentioned before, enables you to copy the actions of profitable traders of your choosing. This feature makes you trade like any seasoned trader you want. You can follow specific traders, monitor their actions as they happen, and opt-in to copy everything they do if you want.

This feature makes eToro the social media platform that bridges the gap between new and seasoned traders and their favorite markets.

eToro deposit and withdrawal methods

Users can deposit funds on eToro by transferring fiat currency into their eToro account. You can use your credit or debit cards as well as a variety of other options, such as wire transfer and PayPal. However, one thing to note is that all fiat funds held by eToro are held in US dollars. If you deposit funds in EUR or GBP, eToro will convert it to USD, which will incur a conversion fee. If we are speaking about crypto, getting funds on the platform is much simpler. eToro wallet has the option to store cryptos that will be traded on the platform, so all you need to do is send the cryptos to that wallet.

Withdrawals work almost exactly the same as deposits. To withdraw fiat currencies, you can use credit and debit cards, bank transfer, and PayPal. However, there is a flat withdrawal fee of $25 for every withdrawal. As this is a pretty steep fee, make sure to plan your withdrawals to avoid extra costs. Withdrawing cryptocurrencies is as simple as transferring them out of the eToro wallet and onto another wallet.

Final thoughts

eToro is quite a unique social investment platform that offers a diverse variety of investment products to people that want to trade on the go. Although it does have much higher fees compared to regular crypto trading services, the benefits may justify the costs. All in all, eToro is an excellent place to get used to trading and learn the basics.

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Crypto Videos

eToro Platform Review – part 2

https://youtu.be/jlhHdGuXjuw

https://youtu.be/jlhHdGuXjuw

eToro platform review – part 2/3

This part of the platform review will take a look at the fees eToro charges to its customers. It will also take a closer look at the crypto security of the platform.

eToro fees

Compared to the ‘standard’ crypto platforms (such as Coinbase or Binance), eToro’s fee structure differs a bit.
As eToro is a brokerage service rather than an exchange, it doesn’t charge trading fees the same way regular crypto exchanges do. eToro users will have to pay something called ‘spread fees‘ when selling crypto, and when buying cryptocurrencies using leverage. To sum it up, if you want to sell (or margin trade) a cryptocurrency, you will have to pay a percentage of the sale price. This percentage fee derives from the ‘spread’ of the asset itself, which constitutes the difference between its ‘buy’ and ‘sell’ price.

As an example, selling one Bitcoin at a market price of $10,000, you’ll also have to pay 0.75% of the Bitcoin’s value (0.75% being the current BTC spread value). Assuming that 1 BTC equals $10,000, you’ll have to pay $75.
Also, traders that are taking out a leveraged position on a cryptocurrency will have to pay ‘overnight fees,’ which are also referred to as ‘rollover fees.’ As the trader is borrowing money from the company to hold a trading position, eToro charges them interest.
eToro Spread/overnight fees
The table below will show the spread and overnight fees of the platform:
Cryptocurrency

eToro Spread Fee


As shown above, the overnight fees for Bitcoin are pretty steep. As a comparison, traditional crypto platforms are much cheaper. Kraken charges 0.01% every four hours of holding a leveraged BTC/EUR or BTC/USD position. So, if someone would hold a position of 1 BTC for 24 hours, they would have to pay around 0.00056 BTC on Kraken, while eToro users would pay $0.0075 BTC.

Similarly, the spread fees on eToro make it more expensive than trading on traditional exchanges and platforms. Binance and Bitstamp each charge only 0.1% for every trade a user makes. On the other hand, eToro’s spread fee of 0.75% for BTC is noticeably more expensive.
On top of all this, eToro also charges withdrawal fees as well as inactivity fees. The withdrawal fee is a flat $25, with users being allowed to withdraw amounts of $50 or more. The inactivity fee is $10 per month and is charged to users whose account hasn’t been used for 4 or 12 months, depending on whether they have deposited any funds.

Security of the platform

Unlike many centralized, traditional exchanges, eToro has experienced no significant scandals in the past. However, security isn’t eToro’s major selling point. Up until 2017 and 2018, cryptocurrencies weren’t directly traded using eToro. Instead, users held and traded a contract for difference (CFD), which allowed eToro to hold no crypto whatsoever.
There was no need for any additional security measures which competing crypto platforms had to have.

Today, when it does offer direct cryptocurrency trading, the additional security layers are unknown to the public. The website doesn’t specify the crypto security measures it uses to protect customers’ assets.
One thing to note is that the eToro wallet, just like other major exchanges, keeps your private key. This means that you have to trust the platform to protect your funds. That being said, eToro is one of the most secure platforms when it comes to general compliance with financial regulation. The platform is being regulated by CySEC in Europe, FinCEN in the US, and the FCA in the UK.

Make sure to check out the third part of our eToro platform review, where we will talk about the platform usability, social trading as well as withdrawal and deposit methods.

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Crypto Videos

Crypto Exchanges VS Crypto Brokerages Part 2 – Are You Getting The Best Deal?

https://youtu.be/b7e8dz6eDgk

https://youtu.be/b7e8dz6eDgk

 

Crypto exchanges VS. Crypto brokerages – part 2/2

 

Trading Exchanges

Trading on a crypto exchange is quite straightforward. All you need to do is select the desired trading instrument and then open your trade. As the chart unveils, you will watch your position. You can place buy as well as sell orders. Most exchanges try to offer some form of different orders, such as limit orders.
One of the advantages that exchanges have over brokerages is that you can pick among a lot of different cryptocurrencies to trade.


Brokers

Brokerage platforms will usually have more analysis tools that will benefit traders to achieve their goals. Most of them have advanced analysis tools, as well as several variations of orders. However, the brokerage platforms will not offer you as many cryptos to trade as an exchange. Brokers have different cryptocurrency pairs available, but they mostly offer only the most popular cryptos.

Brokers also tend to have quite tight spreads, unlike some of the less liquid exchanges. This feature prevents slippage from happening.
Another great advantage is that the brokerage platforms have many more features to offer in general. Unlike most exchanges, brokerages offer the option to put multiple charts in your view-window, track the quote flow, use sets of indicators, etc. Some brokerages even offer the option to create automatic trading strategies without any previous knowledge of coding.


Safety & Security Exchanges
Crypto exchanges can be divided into two:
Centralized exchanges! Decentralized exchanges!
Centralized exchanges are considered relatively unsafe. You can create a very strong password as well as enable 2-factor authentication. However, this does not guarantee 100% safety of funds. The main thing is that the account owner is not the owner of the keys that hold the funds. As the exchange holds all these keys, hackers only need to hack one account – the exchanges, rather than each account individually. Many exchanges got hacked, and most of these funds never got back in the hands of the original owners. While exchanges are increasing their security levels as well as introducing forms of insurance, this is far from what brokers have.
Decentralized exchanges are considered the safest way to trade cryptocurrencies, as you hold your own wallet keys. However, these exchanges are not yet big enough to have good liquidity, which creates large spreads and slippage.


Brokers

Trading cryptocurrencies with a regulated broker will guarantee some degree of safety to the clients. First of all, most brokers are regulated with a reliable authority, such as CySEC, FCA, SEC, etc. If a broker is regulated, its business is strictly audited. Regulated brokers are also members of investor compensation schemes, which ensures claims of clients and against brokerages that are unable to meet obligations due to financial downfall or bankruptcy.
However, one thing to note is that almost no brokers trade with real cryptocurrencies, but rather with derivates. While this is not necessarily bad, traders should know that using brokers will often result in trading with contracts that derive their value from cryptocurrencies, rather than with cryptos.

Conclusion

In conclusion, while cryptocurrency trading is considered high risk and due to their volatility, people can choose safer ways to ensure that their funds are always in the right hands. Exchanges and brokers have their advantages and disadvantages, and traders should pick very carefully based on their goals while trading.

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Crypto Education

eToro Platform Review – Part 1

https://youtu.be/3PB4917lntM

https://youtu.be/3PB4917lntM

eToro platform review – part 1/3


eToro is one of the most popular trading platforms in the world. It lets users trade various assets, such as traditional stocks, shares, as well as major cryptocurrencies. When compared to other crypto trading services, it is a fully regulated exchange with a user-base of more than 10 million registered users.

eToro in a nutshell


eToro is aimed at investors who are new to the investment world, as their interface does not consist of many analysis tools. They are rather a simple platform that gives people the option to buy or sell assets on the go. It is a great one-stop-shop as it offers a variety of assets. However, advanced traders may also benefit from eToro by using margin trading. Less experienced traders have the option to use eToro’s social trading where they can follow seasoned investors, their research, as well as insights.

eToro offers various instruments, including:
16 cryptocurrencies (BTC, ETH, BCH, XRP, DASH, LTC, ETC, ADA, EOS, NEO, XLM, IOTA, TRX, ZEC, BNB. XTZ).

47 currency pairs (including EUR, USD, CAD, GBP, AUD, PLN, SGD, SEK, JPY, and many others).

13 stock index CFDs (SPX 500, UK100, NSDQ100, China50, AUS200 and others).
Over 1300 stock CFDs.
83 commodity CFDs (including oil, gold, silver, copper, natural gas, and platinum).
The U.S. customers are allowed to trade cryptocurrencies only for now.

eToro background

The company was founded in 2006 by Yoni Assia (Chief Executive Officer and Founder) and Ronen Assia (Chief Product Officer and Co-Founder). eToro can be proud to say that it has a history stretching further back than the whole crypto industry itself. It started its life as an online FOREX brokerage.

It made its first move towards crypto in January 2014, when it started to offer Bitcoin trading to their user base of three million. At the time, the crypto trading they offered was trading CFD’s, which meant that traders didn’t purchase the underlying asset. However, eToro (slowly but surely) switched to offering direct crypto trades in September 2018. When buying crypto on eToro, you actually own it as well as withdraw the cryptocurrencies you buy into your eToro wallet.
eToro boasts over ten million users today, with its growth primarily driven by the smart marketing moves and the crypto industry. On top of that, its accessibility and great customer support make eToro expand even further.
Check out part 2 of our eToro platform guide, where we will talk about the fees, spreads, and security of the platform.

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Crypto Videos

Changelly Exchange In Depth Review Part 3 – The Cheapest Way To Buy Crypto?

https://youtu.be/fRThtymSTXU

https://youtu.be/fRThtymSTXU

Changelly exchange in-depth review – part 3/3

This is third (and the last) part of the Changelly in-depth review. This part of the review will touch upon the exchange’s fees, deposit methods as well as security.

Changelly Fees

The platform’s fees consist of:
Deposit fees, Trading fees, and Withdrawal fees.
Deposit fees may vary depending on the way a user deposits the funds.

Trading fees

When choosing an exchange, you must take a look at how the trading fees are structured. Every trade occurs between two parties the market makers, whose order already exists on the order book, and the market taker, who takes the maker’s order. While makers create market liquidity, takers reduce it. Most exchanges differentiate between the fees they charge to takers and the fees they charge makers.
However, Changelly opted for a different route. The exchange charges the takers and the makers the same fees, which is called the “flat fee rate.” The platform offers a flat trading fee of 0.25%, which is considered the industry standard. This fee structure might be an attractive trading model for traders who prefer to take already existing orders from the order book, rather than having to wait for their orders to get filled.

Withdrawal fees

Many exchanges try to maximize their profits by having low trading fees while maintaining extremely high withdrawal fees. Changelly is, however, not one of them. The company charges only 0.0001 BTC for withdrawals.

Deposit Methods

Users can deposit their funds through the regular fiat transfer via the platform’s corporate partners using credit cards (such as VISA and MasterCard). This feature is extremely helpful to novice crypto investors as one of the main things they want is fiat deposits. There are many exchanges that offer no fiat currency deposit support at all, which makes Changelly stand out.
Changelly has also lowered the entry barriers for crypto-to-crypto exchanges recently. This makes traders able to deposit with as little funds as possible.

Changelly Security/Account Verification

Changelly does not submit every single user to its verification protocol. If you want to use the platform’s conversion services, you don’t need to submit any of the KYC-documentation (such as passports, utility bills, or ID photos). The only thing you need to use the conversion services is a valid wallet address. However, if you would use Changelly to purchase cryptocurrencies by using some form of fiat-based deposits (such as a credit card), then you will need to submit additional documentation in order to pass the KYC process.

General

Changelly states that security is one of its main priorities. When tested on the Mozilla Observatory test, the platform received a score of B, which is a great score for a cryptocurrency exchange. While it can be improved, many popular exchanges score as low as F on this test.

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Crypto Videos

Changelly Exchange In Depth Review Part 2 – The Cheapest Way To Buy Crypto?

https://youtu.be/AVc0g7KD9Ig

https://youtu.be/AVc0g7KD9Ig

Changelly exchange in-depth review – part 2/3

 

This is the second out of three parts of the Changelly in-depth review. This part of the review will touch upon the exchange’s tools, its user interface as well as supported countries.

Changelly Tools

The platform released a new version of their mobile app with the feature of a fixed-rate mechanism onboard for both Android and iOS in October 2019. This feature allows users to swap their assets while avoiding the risks of market fluctuations. However, to those who would like to exchange cryptocurrencies at a floating rate, Changelly offers a market fee of 0.25% for all crypto-to-crypto transactions. This rate is considered the industry average at the moment. In addition to these features, users have the ability to buy the desired crypto assets by using their bank card right from the Changelly mobile app. They have the option to explore crypto exchange trade rates in real-time mode.
The app features do not end here. Changelly mobile app gives its users the ability to log in to their original Changelly website account, track the transaction history, store an address list for the most used wallets on the account as well as get assistance from the Changelly team in the support section.

The platform also offers its API as well as a customizable payment widget to any crypto service provider that wishes to broaden its audience by implementing new exchange options. Many wallets are using this feature on top of their web/desktop/mobile applications.

Changelly User Interface

The user interface is one of the most important things for traders, and one of the main characteristics of different exchanges. The user interface at Changelly is quite simple and more intuitive than what you could see with regular centralized exchanges. The reason for this is because:
Changelly is more of an exchange service rather than an actual exchange;
Changelly is made to be used by the inexperienced individuals, which requires user interface simplification.

Restricted Jurisdictions

While Changelly is available in many countries, it restricts users from many countries as well from joining. The platform is not accessible to traders from the USA, Cuba, Iran, North Korea, Crimea, Sudan, Syria, Bangladesh, or Bolivia. Users from other countries that are subject to United Nations Security Council Sanctions List, as well as its equivalents, are not allowed to the user the platform.

Changelly implemented AML/KYC procedure into their service. This means that the platform has the option to ask its users to show “proof-of-funds” as well as to go through the KYC check. The KYC procedure is done only if the Changelly’s automated risk management system marked some user’s transactions as suspicious.
Check out the third and last part of our series on Changelly, where we will discuss the platform fees, deposit methods as well as security.

Categories
Crypto Videos

Changelly Exchange In Depth Review Part 1 – The Cheapest Way To Buy Crypto?

https://youtu.be/ZM8lXErwEoc

https://youtu.be/ZM8lXErwEoc

 

Changelly exchange in-depth review – part 1/3

This is the first out of three parts of the Changelly in-depth review. This part of the review will touch upon the exchange’s background, how it works exactly, and what its advantages are.

General Info

Changelly is not an exchange like the others. This platform is an instant crypto exchange that started operating in 2015. While it was previously headquartered in the Czech Republic, it is now based in Hong Kong. It also has offices around the world, including Malta, Great Britain, and Brazil.
The group that founded Changelly is MinerGate, a team with a long track-record on the crypto market. However, MinerGate has no involvement in Changelly’s current operations. The current CEO of Changelly is Eric Benz, who has five years of experience working in the industry of innovative financial technology as well as the blockchain field.

How does Changelly work?

This platform is best at finding the best available rates for different trading pairs on the market. Changelly actually shouldn’t be considered exchange per se, as it is a crypto exchange service. The platform is non-custodial, which means that you are not purchasing crypto on Changelly, but rather buying crypto from another exchange. The platform provides users with a window into other exchanges (such as Binance, Bittrex, Poloniex, and HitBTC).

The platform has over 150 cryptocurrencies listed. It focuses mainly on crypto-to-crypto trading. However, it is also possible to buy crypto with fiat currencies using Changelly’s card payment partners, which are Simplex and Indacoin. Users that want to use the fiat-to-crypto transactions need to comply with the KYC policy. They will also be subject to higher service fees

Primary Advantages of Changelly

The platform lists five primary advantages of its trading platform on the landing page:
The best rates on the market;
Transparency in fees;
Fast transaction speed;
High limits and
24/7 support.

All five of these advantages are crucial for its users.

Changelly Affiliate Program

The platform also has an affiliate program. If you refer another user to Changelly, you will be eligible to collect 50% of the fees from every transaction they make within the promo period. This deal is not time-limited, but rather permanent. There are two ways you can join the Changelly affiliate program:
Through the Changelly widget;
By using the exchange button with a referral link.

The 50% revenue share model will work for 90 days from the referred user’s registration. We have to note that this is an unusually short referral period, as most exchanges offer permanent commission payments. This means that some other exchanges offer affiliate programs where you will never stop receiving commissions, as long as the referred user keeps on trading.

Check out the second part of our Changelly in-depth review three-part series, where we will talk about the platform UI and supported countries.

Categories
Crypto Videos

Bittrex Exchange In Depth Review Part 1

https://youtu.be/oH6mewieDSM

https://youtu.be/oH6mewieDSM

 

Bittrex exchange in-depth review – part 1/2

This part of the in-depth review of the Bittrex exchange will touch on the basics of the platform, its team as well as the liquidity of the exchange itself. This is the first of 2 parts of the Bittrex in-depth review.

General Info

Bittrex is an exchange founded in Seattle, Washington, USA. The exchange started off its operations in February of 2014. Back when the company was founded, there were a lot fewer exchanges, so the exchange became extremely popular as the industry was not as crowded.
Bittrex is still considered a popular exchange, though its popularity dropped over time. The Bittrex team considers this exchange to be a global leader in the crypto revolution. They market their exchange as a platform designed for people who require extremely fast trade executions, secure digital wallets as well as leading industry practices.

Bittrex doesn’t just have its platform, but also a “Blockchain Incubator.” To promote global innovation in the industry, Bittrex works with various teams so they could help new tokens with potentially great use-cases to transform the industry they are targeting.
Bittrex is one of the most popular exchanges that originate from the USA. As they are operating from the USA, they permit US investors to join the platform (Unlike BitMEX, which does not allow US investors on their platform).

Team

The main people who stand behind the Bittrex exchange are Bill Shihara (the company Co-Founder and CEO), Richie Lai (which is also Co-Founder as well as the CIO – Chief Information Office) and Rami Kawach (CTO). These three individuals come from a background of cybersecurity. They have previously worked at many well-established companies in the tech-sector (such as Blackberry & Amazon).

The Bittrex Trading Engine

Bittrex notified its user base of an update to its platform’s trading engine on 25 February 2019. The update then got carried out on 27 February 2019. The purpose of this major update was to make the platform much faster, scalable as well as to pave the way for “additional, exciting upgrades and features” later on. Since the update, the order book updates faster, while overall order execution is much smoother. In fact, the orders process speed is more than 20 times faster than before the platform update happened.

Liquidity

Bittrex’s liquidity is considered decent. However, there is quite a distance to cover if the exchange wants to catch up with the top 10 exchanges in terms of liquidity. Bittrex reported its 24-hour trading volume at approximately $13 million in February 2019. On 11 June 2019, the report showed Bittrex’s 24-hour trading volume increasing almost five times, coming at $55 million. However, the past months have shown us that Bittrex’s volume reduced overall.
Check out part 2 of our Bittrex in-depth guide to learn more about the platform itself, its fees and deposit methods, as well as the security of the exchange.

Categories
Crypto Guides

What Should You Know About A Cryptocurrency Exchange?

Introduction

Introduction

Introduction

The cryptocurrency exchange is a place that allows trading cryptocurrencies through a trading platform. These are platforms where people can exchange one cryptocurrency for another one, and even for fiat currencies, for that matter. Their operation is very similar to a traditional financial exchange. The cryptocurrency exchange’s primary operation is to allow the buying and selling of digital assets as well as other assets (fiat currencies). Note that digital cryptocurrency (DCE) is another reference to a cryptocurrency exchange. These exchanges can be like a stock exchange or a currency exchange.

Cryptocurrency Exchange Explained

As mentioned, these exchanges are similar to traditional financial exchanges. To clearly understand this, we may bring out the differences between the crypto exchanges and the conventional exchanges. I a cryptocurrency exchange, buyers, and sellers trade based on the current market price of the cryptocurrencies. Here, exchanges play the role of the middleman. Just like on the stock market, there is some fee charged on each transaction.

Some exchanges deal only with cryptocurrencies, while others that deals with the exchange of both cryptocurrencies and fiat currencies. For example, in these exchanges, you can trade the US dollar for Bitcoin.

Cryptocurrencies are typically unstable in terms of value and sourcing. For instance, cryptos like Bitcoin have been under major dispute events where the value of Bitcoin changed dramatically in a very short time, or incidents where the major exchanges went down due to thefts and frauds.

Talking about the most popular and reliable exchanges, Coinbase’s GDAX (AKA Coinbase Pro) is an example of that. Also, there are exchanges run by third parties where there is a middleman, and  decentralized exchanges that mimic traditional exchanges like IDEX. In decentralized systems, trading is based on smart contracts and is not powered by a centralized third party system for the most of it. Trading with centralized exchanges will require a lot of information to be produced. However, they do allow the trading of fiat currencies. DEX exchanges, one the other hand, require lesser information but they do not allow exchanging of fiat currencies.

Classification of Cryptocurrency exchanges

Based on the exchange’s organizational hierarchy and overall controlling bodies, we can classify them as Centralized Exchanges and Decentralized Exchanges.

The Working Of A Centralized Cryptocurrency Exchange

Since these exchanges are centralized, they are run by a third-party or other organizations. More like a bank for exchanging fiat currencies. Here, the middleman takes control over whatever the assets are being traded on the network.

The Working Of A Decentralized Cryptocurrency Exchange

A decentralized exchange (DAX) is a cryptocurrency exchange which operates without the existence of a third party, or a central authority. In simple terms, decentralized exchanges allow peer-to-peer trading of cryptocurrencies. However, there have been signs that these exchanges have been suffering from low trading volumes and market volatility. And to solve this issue, protocols like 0X, Stellar, and Bitshares are being implemented.

Top Cryptocurrency Exchanges

There are several crypto exchanges to from, but not all have the features and technicalities. Below are the exchanges we have listed out by considering factors like user-friendliness, accessibility, security, and fees.

  • Coinbase
  • Kraken
  • Poloniex
  • Bitstamp
  • Coinmama
  • Bitsquare
  • Binance
  • Bitbuy.ca

These exchanges and many more are discussed in other articles, and you may find them here. So watch out this space for more great crypto content.

 

Categories
Crypto Videos

Poloniex In Depth Exchange Review Part 3

https://youtu.be/sNokb4rjl1g

https://youtu.be/sNokb4rjl1g

Poloniex in-depth exchange review – part 3/3

Poloniex platform safety

Poloniex offers security to its users in multiple ways. To prevent hackers from entering the back-end of the platform, Poloniex stores the majority of deposits in an air-gapped cold storage offline.

The exchange has auditing programs that are constantly being performed. These programs are used to monitor the activity on the platform with the goal of detecting suspicious activity. If they notice anything suspicious, the results are reported and then blocked.
Poloniex experienced one security breach in 2014, but the users were refunded. This event happened when the exchange was quite new and wasn’t well versed in handling intruders. However, no breaches were reported since then.

Fees

Poloniex offers maker-taker and volume-tiered fee schedule. Users can check their Trading Tier Status in their account tab to see which level they are at. The greater your trading volume, the lower your fees are.
Fees differentiate between market makers and takers. Market makers are traders that create an order within the order book, while the takers “take the order” from the order book. Market makers have lower fees as they improve the liquidity of the exchange, while takers reduce it (and therefore have a higher trading fee).


The account trading volume is calculated every 24 hours. It is based on the past 30 days and combines both margin and spot trading.

Poloniex customer support

One of the areas where Poloniex cannot be proud of is their customer service. Multiple online reviews claim extremely long wait times, with some users reporting having to wait as much as 90 days to resolve their issues. The problem seems to be in the rising demand of the Poloniex platform rather than the quality of the customer support itself.

To make up for the slow support response time, Poloniex offers plenty of documentation that can help users resolve their issues. Most of the documents are located in the Support Center. Users can find the answers to the most common questions and hopefully resolve the issues themselves.

Poloniex Customer Reviews

Poloniex is a well-known exchange with many reviews online. As with every other popular exchange, the reviews are mixed. The slow customer support response time was one of the biggest downsides to the platform. Some traders also stated that they had liquidity issues as well as issues. Having to wait for approval on a withdrawal request for a long time is another thing that the reviewers were stating.
Despite these issues, the majority of the reviews are positive. Traders are coming back to Poloniex because of its great trading tools, high trading volume as well as and a large number of trading pairs.

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Forex Videos

Poloniex In Depth Exchange Review Part 2

https://youtu.be/4WvIXYt4YWI

https://youtu.be/4WvIXYt4YWI

Poloniex in-depth exchange review – part 2/3
Account creation

Creating an account with Poloniex is pretty simple when compared to the account creation process of some other exchanges. As Poloniex is purely a crypto-to-crypto exchange, the lack of required regulations it must follow makes the signup process far easier. Users are allowed to make only one account, and exceeding this number can and will cause you to be suspended from the platform. After creating an account, traders get access to all the services that Poloniex supports. This includes access to their exchange, lending, as well as trading.

 

Even though Poloniex is not the most suited exchange for beginners as they cannot buy cryptocurrency with fiat directly on the exchange, its user interface is very intuitive for both beginners and experienced traders.

Account verification levels

Despite the lower fees that Poloniex offers to those who trade high volumes each day, traders should keep the withdrawal limitations. You are allowed to withdraw up to $2,000 per day with Poloniex if you passed only the first level of verification. This can prove to be quite an obstacle if you trade with high volumes. The first verification level requires only name, email, as well as your country of residence. Even this verification level provides access to every part of the platform.

However, the two-level verification is where the limits increase greatly. This level requires proof of residence, postal address, date of birth, a form of ID as well as your phone number. Once everything gets approved, your limits for both withdrawals and deposits will be increased to $25,000. A higher level of verification is available for traders who need an even higher limit. However, this level of verification requires you to contact support directly.

Trading on Poloniex

Trading on Poloniex is very simple and intuitive. After ensuring you have deposited enough funds into your account, the next phase may begin. Certain cryptocurrencies require a minimum deposit that can be checked before trading. Select the appropriate trading pair once you have enough funds deposited, and the trading may begin.


Once in the trading tab, you can choose whether you want to buy or sell simply by inputting the desired price plus and coin quantity. You can manually enter an amount, select the lowest ask price, or choose an order from the “order book.”


The order will either instantly be filled or go to the “order book” until a user that is willing to make the trade at set terms shows up. Once the order fills, you can view it in Trade History.

Poloniex margin trading

Poloniex is one of the industry leaders when it comes to margin trading. This platform feature is quite efficient to use as it utilizes peer-to-peer functionality for borrowing funds. You can use the trading platform to secure your trading funds as well as work with other traders by utilizing the lending features.

Check out our third and last part of Poloniex in-depth guide and learn more about the platform’s safety, fees, and customer service.

Categories
Crypto Videos

Poloniex In Depth Exchange Review Part 1 – #Cryptotrader

https://youtu.be/38V_3sHjLOA

https://youtu.be/38V_3sHjLOA

 

Poloniex in-depth exchange review – part 1/3

With so many different cryptocurrency exchanges flooding the market, it’s hard to pick the right one. However, Poloniex remains a prominent exchange due to how long it’s been in the industry, and because of all the features it offers to the traders. On top of that, Poloniex is one of the few exchanges that is based in the US. Poloniex prides itself on offering its users advanced trading features alongside with maximum security.

Poloniex is a cryptocurrency exchange that started its operations in 2014 out of Wilmington, Delaware. Poloniex has been acquired by Circle, a Goldman-Sachs backed company. This got announced as great news as such a big player entered the crypto market. With Circle as the new owners, Poloniex aims to be the first fully regulated cryptocurrency exchange. They will be doing so by registering with the SEC as well as FINRA as a broker/dealer.

Poloniex is fairly consistent in having the top trading volumes for several altcoins. The exchange also has a great number of trading pairs that are offered to the users. One of the biggest downsides of Poloniex is that it does not offer fiat-to-crypto trading.

Who is Poloniex made for?

Newcomers in the cryptocurrency trading industry may find Poloniex a little frightening at first. First of all, the exchange deals only with cryptocurrency, so you purchasing crypto via Poloniex is not possible.

Additionally, the exchange as a whole is aimed a bit more towards experienced traders than those new to the cryptocurrency space. Poloniex has no mobile app, which makes the exchange somewhat challenging to use on the go.

Poloniex features

Poloniex offers many features that experienced traders will appreciate. A broad range of efficient data-analysis tools, as well as very detailed charts, are provided by the exchange. Poloniex’s high-volume nature appeals greatly to traders, especially the ability to do lending and trade on a margin.


Traders with programming knowledge will value that almost all the trading interface code is executed on the client-side. That means it is open-source, so you can study it and learn more about how Poloniex logic works. Developers will also appreciate the avaliability of an API. The Polonex API makes it possible to develop tools for data analysis, account management, custom trading and more.

Supported countries

Poloniex is based in the United States, but anyone can use it as long as their country doesn’t have laws that prohibit the exchange of cryptocurrency. As Poloniex is a crypto-to-crypto exchange, it does not need to adhere to any financial regulation.

Conclusion

People that want a reliable exchange that supports a lot of cryptocurrency pairs and offers additional features, such as margin trading, Poloniex is a great option.
With the exchange being acquired by Circle, you can be assured that Poloniex will adhere to all regulations required in order to keep the exchange legal and relevant.

Check out part 2 of our Poloniex in-depth review to learn more about account creation, trading, and using margin on this exchange.

Categories
Crypto Videos

Is Huobi The Right Exchange For You! – Part 2 Trading

https://youtu.be/K9VoqUOyygM

https://youtu.be/K9VoqUOyygM

Is Huobi the right exchange for you? In-depth exchange review part 2/2

Huobi platform

Huobi offers its users a web-based trading platform with basic trading functionality as well as a desktop version of the application for Windows and Mac computers. The desktop application versions are currently not available in English.

The Huobi platform has a fixed layout that cannot be changed. Each section of the platform is organized into a fixed position. The sections can, however, be expanded or minimized. The biggest part of the screen is taken by the charts and the watch list. The order windows section can be seen at the bottom center of the screen. Traders are offered two main order types:

1. Market order
2. Limit order

Huobi has both their own original charts as well as Trading View charts.

Huobi has both their own original charts as well as Trading View charts.
Placing an order on the platform is easy as the value of each field is shown in USD. This can come in handy when dealing with non-fiat cryptocurrency pairs. Huobi also has a field that shows the maximum trade size which lets you drag the size slider to the desired trade size value. This is a nice feature as it provides ease of use when trying to decide on how much of one crypto to trade for another.

The Huobi web platform is user-friendly and has a modern feel, all thanks to its clean and responsive UI.
Mobile Trading

Huobi has several mobile apps which are available on both iOS and Android. The Huobi Bitcoin app is the latest application which focuses on trading capabilities. It is also available for both iOS and Android devices.


The application, just like the web platform, follows several steps for user authentication. It offers both fingerprint and security patterns to its users. Even though the layout is a bit different when compared to the web platform, the features are pretty much the same.


Charts come with just six indicators. However, they are very robust and responsive, which makes the user experience quite smooth. It is quite easy to navigate the charts by pinching and zooming on prices.


The mobile application has another great feature, where, upon logging into the mobile app, the web platform favorite trading pairs cross over to the mobile trading app. The sync between the web platform and mobile app makes it convenient to trade your favorite cryptocurrencies wherever you are.

Conclusion

In conclusion, Houbi is a well-known exchange for a reason. It is a solid platform that can be used both while stationed or on the go. It offers some great features and has stellar reviews.

Categories
Crypto Videos

Is Huobi The Right Exchange For You! Part 1

https://youtu.be/t_7qOjRLbz8

https://youtu.be/t_7qOjRLbz8

Is Huobi the right exchange for you? In-depth exchange review part 1/2

 

Huobi is a cryptocurrency exchange that started operating in 2013. It currently has over a million users as well as over $1 billion in assets under its custody. Though headquartered in Singapore, Huobi has an international presence. It has subsidiaries located in China, South Korea as well as the United States, where it is registered with the FinCen under HBUS Inc. As of March 2018, Huobi is active in 52 US states, operating as a Money Service Business (MSB).

 

Huobi offers support to nearly 280 crypto assets, including 88 Ethereum-priced pairs, 105 Bitcoin-priced pairs, 37 pairs priced in USDT, as well as over 50 pairs on its HADAX platform.
Huobi Commissions & Fees
Huobi tries to offer competitive trading fees to its users. It charges a 0.2% fee on major crypto pairs. Being a market maker or taker does not matter on Huobi.

 

Huobi offers a VIP trading commission schedule to its active traders. The VIP trading commission is tier-based. The higher the VIP membership tier, the greater the commission discount is. In order to obtain a VIP trading discount, Houbi users must pre-purchase the VIP tier they think is the most cost-effective for them. This purchase can only be made with the Huobi Token that is issued by Huobi.

The Huobi Token simply acts as a discount token for the Houbi VIP users. The number of tokens directly determines the level of VIP access. The VIP level can range from level 1, which requires 120 tokens per month all the way up to level 5, which requires 12,000 tokens per month.
Determining the most cost-effective deal is detrimental. A user looking for a 10% discount on their trading fees would need to pay 120 HT, which, with Huobi Token costing $3.23 per unit, would cost $387.6. Therefore, buying this discount level would only be worth it if the trader is willing to spend more than $3,876 in trading commissions. This would, at a 0.2% commission rate, require spending of $1,938,000. However, as the company gave away around three million Huobi Tokens for free in early 2018, the exchange’s earliest users can have access to the greatest discounts if they use these tokens to purchase their VIP memberships.

 

While Houbi’s VIP profitability “threshold” is high, its base fees seem competitive enough for regular traders.

Security

Huobi offers its users a hosted wallet solution, where users can enable Two-Factor Authentication (2FA). However, this security layer has become an industry standard and, therefore, cannot be considered a feature. Users are notified via SMS upon each successful login.
When talking about storage security, Huobi users should not be worried about security breaches as much as other exchange users. This is because Huobi keeps 98% of its assets in cold storage. The access to cold storage is only granted to internal staff. It is also protected by multi-sig technology.

Huobi has built an anti-DDOS attack system to keep its infrastructure as sturdy as possible.
Account security is also something Huobi is proud of, as fund withdrawals have a couple of interesting caveats. If users change their security settings and immediately attempt to withdraw their funds, Huobi will manually review the withdrawal. On top of that, they may email or call the user to obtain a withdrawal confirmation. Otherwise, withdrawals require three separate codes:

One sent via SMS to the user!
One sent via email!

One 2FA code generated on the user’s device.
In addition to these security features, Huobi created an Investor Protection Fund in January 2018. This fund is used for compensating investors in extraordinary circumstances.
Check out our part 2 of Huobi in-depth review for more on how the platform works.

Categories
Crypto Videos

BitMEXTutorial & In Depth Guide Part 5 – Can Beginners Trade?

https://youtu.be/2dL7d8-6NUQ

https://youtu.be/2dL7d8-6NUQ

BitMEX in-depth guide (part 5/5) – Platform safety and security

Our last part of the BitMEX in-depth guide will dive into the safety and security aspects of the platform.

Is BitMEX a safe and secure platform?

BitMEX is considered to have an extremely high level of security. The platform utilizes multi-signature deposits as well as withdrawal schemes, which are only usable by BitMEX partners. The company also utilizes Amazon Web Services to further protect their servers with text messages, two-factor authentication, and hardware tokens. BitMEX’s security protocols are quickly becoming the industry standard.


BitMEX has a risk-check system which requires the sum of all account holdings on the platform to be zero. If the sum of account holdings does not equal zero, all trading is immediately halted until the issue is fixed.
BitMEX utilizes the multi-signature deposit and withdrawal technology. All exchange addresses are, by default, multi-signature. All funds are kept offline. BitMEX users’ private keys are never stored on any cloud servers to avoid any misuse or theft. Deep cold storage is utilized for the majority of the users’ funds. As noted in previous parts of our review, BitMEX’s withdrawals are hand-checked by at least two of their employees before being sent out; all to increase the safety of its users. Deposit addresses are verified externally to ensure that they contain the keys that are supposed to be controlled by the founders. If they do not contain the matching keys, the system shuts down immediately, and all trading is halted.

The BitMEX trading platform is written in a kdb+ database. This database is popular amongst major banks, especially in high-frequency trading applications. BitMEX’s engine seems to be faster as well as more reliable than the engines of Poloniex and Bittrex, which are considered BitMEX’s competitors.
The platform uses email notifications as well as PGP encryption for all communication. BitMEX encrypts and signs all automated emails sent by or to its users’ accounts by the [email protected] email address.

The exchange did not suffer from any form of a security breach in the past. However, their Twitter handle did get hacked in November 2019, which caused mass panic and hysteria amongst its users.

However, no funds were stolen as their platform safety was not in danger, which they confirmed on the same day in one of their Tweets.
Summary
BitMEX is certainly not a perfect exchange. It has encountered a couple of complaints, mostly regarding technical issues or the complexity of using the platform in general. Older complaints can be seen online as well, and the majority of them regard issues of low liquidity. However, low liquidity is no longer a problem with BitMEX.
BitMEX is clearly not a trading platform aimed at the amateur investor with limited knowledge of trading as well as the crypto industry. Its interface is extremely complex, which can bring adjustment problems to its users. The platform is not extremely user-friendly, as navigating the platform is not quite as intuitive as it could be.
On the other hand, the BitMEX platform provides a wide range of tools that experienced users can utilize and appreciate. By utilizing these tools, users can obtain all the information they need to maximize their trading potential.

Categories
Crypto Videos

BitMEXTutorial & In Depth Guide Part 3 – Can Beginners Trade?

https://youtu.be/R95lcaUoTEc

https://youtu.be/R95lcaUoTEc

BitMEX in-depth guide (part 4/5) – BitMEX’s beginner-friendliness and customer support

 

This part of our guide will dig deeper into what BitMEX has to offer in terms of customer support and if it is generally a beginner-friendly platform.

Is BitMEX beginner-friendly?

BitMEX attracts a great deal of volume across crypto-to-crypto transfers. This helps maintain BitMEX as a hot topic. On top of that, BitMEX has relatively low trading fees and can be used around the world (except in the US).

All this helps attract the attention of beginners that want to trade on leverage. When starting, the platform offers 5 to navigate:

Trade tab: This is the trading part of BitMEX. This tab allows traders to select their preferred trading instrument as well as to choose leverage. They can place and cancel orders in this tab. This tab shows the taken position information as well as other key information in the contract details.

Account tab: This tab shows all the account information. This includes the available Bitcoin margin balances, deposits, withdrawals as well as trade history.

Contracts tab: This tab shows additional instrument information. This includes funding history, contract sizes, leverage, offered expiry, underlying reference Price Index data, and other key features.

References tab: This tab allows users to learn about futures, perpetual contracts, position marking, as well as and liquidation.

API tab: This tab offers the option to set up an API connection with the BitMEX platform.
BitMEX employs customer support that is available 24/7. The BitMEX team can also be contacted via Twitter or Reddit.

In addition to this, BitMEX offers a variety of educational resources. This includes their FAQ section as well as guides on futures and perpetual contracts.

BitMEX also has a blog that produces high-level descriptions of numerous subjects.
BitMEX offers quite a lot of features, but the truth is that the platform is not exactly suitable for beginners. Margin trading, futures contracts, and swaps are not easily understandable concepts that push beginners away from the platform.

BitMEX Customer Support

As previously mentioned, BitMEX has 24/7 customer support on multiple channels. This includes email support, ticket systems, as well as social media support. The typical response time of their customer support is approximately one hour. Most BitMEX users noted that the customer support service responses are generally helpful and that they are not automatized.


The BitMEX platform also offers a knowledge-base as well as the ‘frequently asked question’ section. These may not always be helpful, but they may offer some assistance when it comes to directing users towards the channels, which will provide further assistance.
Make sure to check out the fifth part of our BitMEX in-depth guide, where we will look into the BitMEX platform’s safety and security.

Categories
Crypto Videos

BitMEX Tutorial & In Depth Guide Part 3 – Is Your Money Safe? Is It Insured?

https://youtu.be/ISAurVVeduQ

https://youtu.be/ISAurVVeduQ

 

BitMEX in-depth guide (part 3/5) – TT International partnership and insurance fund

This part of the BitMEX guide will show its partnership with Trading Technologies International and how it affects the users, as well as the insurance fund’s importance in ensuring that every trader gets their fair share of profits.

Trading Technologies International – BitMEX partnership

HDR Global Trading, the company behind BitMEX, has partnered with Trading Technologies International in 2019. Trading Technologies International is a leading high-performance trading software provider. The TT platform’s design is aimed specifically at professional traders, brokers, as well as market-access providers. It incorporates a wide variety of both trading tools as well as analytical indicators. This partnership is crucial because it provides BitMEX traders with global market access as well as trade execution through TT’s privately managed infrastructure.


The BitMEX insurance fund
One of the main selling features of most trading platforms is margin trading. However, as a result of how much leverage is involved on these platforms, it’s entirely possible that the losers could not be able to cover the margin in their positions in order to pay the winners.

Traditional exchanges such as the CME (Chicago Mercantile Exchange) try to offset this problem by using multiple layers of protection. Cryptocurrency trading platforms are currently unable to match these levels of protection provided to winning traders.

To solve this issue, BitMEX created an insurance fund system. When a trader opens a leveraged position, the position is unwilling and forcefully liquidated as soon as their maintenance margin drops too much.
A trader’s profits and losses do not reflect the actual position price. When a trader is liquidated on BitMEX, their equity previously associated with the open position goes down to zero.
To better explain it, we will present you with an example. The trader has taken a long position with leverage of 100x. If the price of Bitcoin drops 0.5%, their position will get liquidated.
It doesn’t matter what the exact price of this trade is when it is executed. From the view of the trader, whatever their liquidation price is, they lose all the funds they had previously put into this position.

Assuming that the market is fully liquid, the bid/ask spread will be tighter than the maintenance margin. In this case, liquidations will manifest as contributions to the insurance fund, as the maintenance margin is 50bps while the market is 1bp wide. The insurance fund should, in this case, rise by around the same amount as the maintenance margin as soon as the position is liquidated. The insurance fund will continue its steady growth as long as the market is fully liquid.

The first chart shows healthy market conditions with a narrow bid/ask spread of just $2 at the liquidation time. The closing trade, in this case, occurs at a higher price than what the bankruptcy price is. Therefore, the insurance fund will benefit from the liquidation.

Example of insurance contribution – 100x long with 1 BTC collateral

The second chart, on the other hand, shows a wide bid/ask spread at the liquidation time. In this case, the closing trade will take place at a lower price than what the bankruptcy price is. Therefore, the insurance fund will have to make sure that the winning traders receive a fair share of profit.

Example of insurance depletion – 100x long with 1 BTC collateral


The bid and offer prices show the state of the order book when the liquidation occurs. The closing price is $3,800, which represents $20 of slippage when compared to the $3,820 bid price.
Note that the illustrations are just oversimplified examples that do not take into consideration fees or other adjustments.
Make sure to check out the fourth part of our BitMEX in-depth guide, where we will look into BitMEX’s beginner-friendliness and customer support.

Categories
Forex Videos

BitMEX Tutorial & In Depth Guide Part 2 – Borrowing Money To Trade Through Leverage

https://youtu.be/6pq8m3fIXrE

https://youtu.be/6pq8m3fIXrE

BitMEX in-depth guide (part 2/5) – contracts and fees

Part 2 of our in-depth guide will focus on explaining what BitMEX offers in terms of contracts, leverage, and how they structure their fees.

Futures and Swaps
A futures contract is, in a nutshell, an agreement to buy or sell an asset in the future. The price of this contract is predetermined. BitMEX allows users to leverage their funds up to 100x on certain futures contracts.
Perpetual swaps are very similar to futures contracts. The difference is that there is no expiry date, and therefore no settlement.
BitMEX also offers Binary series contracts. They are prediction-based contracts that can settle at either 0 or 100. These contracts are a much more complicated way of betting on a given event.

Bitmex Leverage


BitMEX allows its traders to use leverage in their positions. Leverage is the ability to virtually borrow money from the platform to place orders that exceed the users’ existing balance. This gives users bigger profits in comparison to placing an order that uses only their wallet balance. Trading, while using leverage, is called “Margin Trading.”

There are two types of Margin Trading:
Isolated – allows the user to select how much of their wallet balance should be used to hold their position when they place an order.
Cross-Margin – all of the users’ wallet balance can be used to hold their position. This type of margin trading should be treated with extreme caution.

The BitMEX platform allows its users to set their leverage by using a simple leverage slider. The platform offers maximum leverage of 1:100 on some assets, while others have lower maximum leverage.

BitMEX Fees


Traditional futures trading has a straightforward fee schedule on BitMEX. As previously noted, BitMEX offers up to 100x leverage, with the amount of leverage that varies from asset to asset.

There are, however, additional fees for hidden orders. A hidden order has to pay the taker fee up until the entire hidden quantity is fully executed. Only after that, the order will become regular, and the user will receive the rebate for the amount.

Deposits and Withdrawals
BitMEX deposits or withdrawals are free. However, the withdrawal fee is based on blockchain load, and the user has to pay only the network fee. The only costs of withdrawal are those of the banks and the cryptocurrency networks.


BitMEX accepts deposits only in Bitcoin. Bitcoin, therefore, serves as collateral on all trading contracts, regardless of whether the trade involves Bitcoin or not.
The minimum deposit on BitMEX is 0.001 BTC. There are no limits to the withdrawal size.

Deposits can be made at any time of the day and will be processed as fast as the network processes the payment. On the other hand, the withdrawals are processed manually once per day. The hand processed withdrawals are there to increase the security level of its users’ funds.
Supported Currencies
BitMEX can be defined as a crypto-to-crypto exchange that makes use of a Bitcoin-in and Bitcoin-out structure. The platform users are currently not able to use fiat currencies as any form of payment.
BitMEX currently supports the following cryptocurrencies:
Bitcoin;
Bitcoin Cash;
Cardano;
Ethereum;
EOS;
Litecoin;
Tron;
Ripple.
Make sure to watch the third part of our BitMEX in-depth guide, where we will look into BitMEX’s TT international partnership as well as its insurance fund.

Categories
Forex Videos

BitMEX Tutorial & In Depth Guide Part 1

https://youtu.be/g3mTV27qV9M

https://youtu.be/g3mTV27qV9M

BitMEX in-depth guide (part 1/5) – BitMEX explained

Bitcoin Mercantile Exchange, better known as BitMEX, is one of the biggest Bitcoin trading platforms currently operating. Its daily trading volume is often over 35,000 BTC monthly. It can also pride itself with over 540,000 monthly accesses, as well as with a trading volume of over $34 billion in Bitcoin since it started operating.

Unlike many other crypto trading platforms, BitMEX only accepts Bitcoin deposits. They can then be used to purchase a variety of cryptocurrencies. BitMEX specializes in advanced financial operations, such as margin trading. BitMEX is currently working without any regulation, much like many other exchanges.
It was founded by HDR Global Trading Limited in 2014 and registered in Seychelles. Its owners and creators are former bankers Arthur Hayes, Samuel Reed, and Ben Delo.

BitMEX’s team comprises of many people, including experienced developers, economists as well as high-frequency algorithm traders.

Signing up to BitMEX

To create an account on BitMEX, users have to register with the website. Registration is extremely quick, as it only requires an email address. The email address, however, must be a genuine address because users will receive a registration confirmation email in order to verify the account. Once registered, users have absolutely no trading limits. Traders must be at least 18 years old to sign up.

BitMEX, however, does not accept any US-based traders. The company will use IP checks to verify that their users are not in the US. While some US users manage to bypass this restriction with the use of a VPN, it is not exactly recommended for US individuals to sign up for the BitMEX platform.

How to Use BitMEX

BitMEX allows its users to trade various cryptocurrencies against various fiat currencies. Users can trade their cryptocurrency against the USD, the Japanese Yen as well as the Chinese Yuan. BitMEX allows its users to trade quite a bit of different cryptocurrencies:

Bitcoin
Bitcoin Cash
Cardano
Ethereum
EOS
Litecoin
Tron
Ripple

BitMEX trading platform is considered very intuitive and easy to use for users that are familiar with advanced trading platforms. However, a beginner may have a hard time following everything on the screen. The interface looks a little dated when compared to some of the newer exchanges such as Binance and Kucoin. Signed up and logged in, traders can click on Trade, where they will find all the trading instruments available.

Clicking on any of the instruments opens the order book, recent trades, as well as the order slip on the left. The order book will show three columns:

Bid value for the underlying asset!
Quantity of the order!
Total USD value of all orders. This includes both shorts and longs!

Trading widgets can be changed and customized according to the user’s viewing preferences. This allows users to have full and absolute control over what is displayed and how. On top of that, BitMEX provides its users with TradingView charting. This feature offers a wide range of charting tools provided by the TradingView platform.

Once a user enters a trade, they can see all orders in the trading platform interface. Tabs showing users their Active Orders, Stops that are in place, Orders Filled (in total or partially) as well as the trade history can be easily found on the main screen.

Even though BitMEX is optimized for mobile use, it only has an unofficial Android app. There are no iOS apps available at the moment. However, trading by using so many advanced features might require using a desktop or a laptop in order to comprehend everything happening on the screen.

Types of orders at BitMEX

Traders are not limited to only simple buying and selling on BitMEX. BitMEX offers various order types for users:

Limit Order (the order will be fulfilled only if the given price is achieved);

Market order (the order is executed instantly and at current market price);

Stop Limit Order (a form of a Stop Order; allows users to set the order price once the Stop Price triggers)

Stop Market Order (a Stop Order that that remains unseen from the order books until the market reaches the trigger price)

Trailing Stop Order (very similar to a Stop Market Order; users set a trailing value that is then used to place the Market Order)

Take Profit Limit Order (the opposite of a Stop Order, used to set a profit target)

Take Profit Market Order (almost the same as the previous type. However, this order will set the order triggered as a Market Order, not as a Limit Order).

Make sure to watch the second part of our BitMEX in-depth guide, where we will look into BitMEX’s futures and swaps, leveraged trades as well as fees!

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Crypto Videos

Coinbase Exchange In Depth Review Part 4 – Adding Payment Methods & Saving Money

https://youtu.be/ju7GTFVJT5E

https://youtu.be/ju7GTFVJT5E

Coinbase Exchange in-depth review – part 4/5

This part of the review will guide you on how to add a payment method to your Coinbase account, as well as how to make your first cryptocurrency purchase.

Adding payment methods
Before buying any cryptocurrency on Coinbase, you will need to attach a payment method to the account. Coinbase offers support for three payment methods:
Debit card;
Bank account;
Wire transfer.
We will show you how to add a bank account as your payment method.

To start the process of adding a payment method, select the “Settings” tab located in the top middle of the page.

Once there, select the “Linked Accounts” tab.


Click on the “Link a New Account” button.


This will enable you to select your preferred payment method.


Debit card
Debit cards great for purchasing smaller amounts of cryptocurrency quickly. Debit card purchases credit the account with cryptocurrency instantly. This can come in handy if you want to buy a cryptocurrency quickly. On the other hand, debit cards have a lower purchase limit than other payment methods. Debit card limits may even be as low as $300 per week. On top of that, debit card purchases have extremely high fees, set at 4%.

Bank account
Bank Accounts are the opposite of debit cards. They better for larger purchases due to their higher limit, but are not immediate like debit cards. When purchasing crypto on Coinbase with a bank account, the price you pay for the cryptocurrency is locked in the moment of purchasing. However, you will not receive the cryptocurrency instantly, as the purchase will need 4-5 business days to process.

If the value of the cryptocurrency you bought goes up in the time it takes to process the transaction; you will have made money without doing anything. On the other hand, if the value of a cryptocurrency goes down, you will have lost money without ever even trading. Additionally, the aforementioned 4-5 days are the days you can not use to trade the bought cryptocurrency as you do not own it until it is credited to the account. With that being said, bank account purchases have some major upsides. The bank purchase limits are much higher. They are starting at $7,500 per week and can only be larger. The transfer fees are also much lower. They are set at 1.5%.


Purchasing cryptocurrency on Coinbase
With your account set up and payment methods added, you can finally start off with buying some cryptocurrency.
Start by clicking the “Buy/Sell” tab at the top of the Coinbase page.
Select the cryptocurrency of choice as well as the payment method and the dollar amount you wish to spend.

This will lead to the purchase confirmation page.
If you have the 2FA set up, Coinbase will ask for the code to confirm the purchase.


Selling cryptocurrency for fiat currency is a very similar process. The main difference between the two is that you cannot sell cryptocurrency using a credit card. Selling cryptocurrency on Coinbase can only be done by using a bank account or a Coinbase USD wallet that will keep your money on Coinbase.

For a more in-depth review of Coinbase, watch part 5 of our Coinbase Exchange in-depth guide.

Categories
Crypto Videos

Coinbase Exchange In Depth Review Part 3 – How To Create A Coinbase Account & Security Features

https://youtu.be/LkCMSPnzMro

https://youtu.be/LkCMSPnzMro

Coinbase Exchange in-depth review – part 3/5

This part of our review will look at account creation and security features of Coinbase.

Creating an account


To set up an account with Coinbase, start off by visiting the Coinbase website and clicking “Sign Up.”

This will lead you to the account creation page. Fill in your name, email, password as well as location. Completing the captcha is also a necessity, as well as the “check” that you are over 18. After doing that and agreeing to the Coinbase user agreement and privacy policy, you have finished a major part of verification.

Coinbase will then send you an email that you have to use to continue with the verification.

This will lead you to the country/phone number part of the account setup.

After filling that info, a 7-digit code will be sent to your phone. You will need to write it in order to confirm the phone number.


After completing that, you may or may not be directed to verify your ID. If you are not instructed to do so, your account set up is complete. However, if you are directed to verify your ID, you will have to do it before you start using Coinbase.

ID Verification

As Coinbase is a US-based company, it must comply with the KYC and AML laws. Know Your Customer (KYC), as well as Anti Money Laundering (AML) laws, require US businesses to verify the identity of each of their customers.
For customers, however, this only means that they need to present a big chunk of their personal information, such as the last four digits of their social security number and their ID photo.
Coinbase will evaluate and potentially check the information presented, so the verification completion may take some time.

After filling out this information, you’ll also be required to submit a photo of your ID.

Verification Levels

Different verification levels offer different limits with Coinbase. If the account is phone-verified, you’ll be able to invest up to $9,500. However, if you verify your personal information, you’ll be allowed to invest an unlimited amount.

Additional Security

After verifying your ID, you’ll want to increase the security of your account by enabling the 2-Factor Authentication (2FA).
To do so, first select the settings tab.


Once you are there, select the Security tab and scroll down to the “Two-Factor Authentication” section.

Make sure that the verification code is set for any amount of cryptocurrency. Select the “Enable Authenticator” button to start the process.

A 7-digit code will be sent to your phone, and you will be required to enter it on Coinbase. After entering the SMS code, Coinbase will generate an authenticator code for you, which allows you to use the 2-Factor Authentication feature.
2FA is an additional security measure that works by generating unique codes based on your authenticator secret code, therefor making your account just a bit safer. To use it, you will have to download a 2FA app such as Google Authenticator to your phone.
After downloading the application, add the Coinbase authenticator code to the app. You can do this two ways:

  • by scanning the QR code;
  • by manually entering the authenticator code.

The mobile app will now generate 2FA codes for Coinbase. They will change every few seconds. Due to the code changing so quickly, someone attempting to get into your account would need to have access to your phone as well as the account info in order to access your funds.
Note: Make sure to write down your secret authenticator code. Store it somewhere safe as you will need this code when you are switching devices.

Once your 2FA is set up, your account will be secure and ready to go.

For a more in-depth review of Coinbase, watch part 4 of our Coinbase Exchange in-depth guide.

Categories
Crypto Videos

Token Swap Explained Part 3 – How To Know If A Token Is Profitable

https://youtu.be/N-aoGwbXuMY

https://youtu.be/N-aoGwbXuMY

Token swap explained – part 3

Part 3 of this series is focused on the token price impact after their token swap.

A deep dive into the price analytics, both pre and post swap, shows that unless the token has incredibly strong brand recognition as well as a significant market cap, it will not attract investors’ and exchanges’ attention.

Out of the 15 projects that were reviewed, only one token improved in token price. The remaining 14 tokens lost their value from when they conducted their token swap.
There are several reasons that affected their price negatively. One of the major reasons was that almost none of them managed to list their native token on a Tier 1 exchange. Native tokens seem to be significantly more difficult to list on Tier 1 exchanges than what most projects thought.
We researched 13 tokens from the previous article, which include:
EOS;
Tron;
Icon;
Aion;
Binance Coin;
Augur
VeChain;
PundiX;
IOST;
Tomochain;
Mithril;
Zilliqa;

CyberMiles Token.
Only two of the tokens (WeOwn (CHX) and Matrix AI) have yet to list their native token on a new exchange since their token swap.
We tracked the exchanges that listed the tokens, which can be seen below.

In total, 110 exchanges agreed to list these 13 native tokens after their token swap. We managed to categorize these exchanges into three tiers: Tier 1, Tier 2, and Tier 3. This classification is made based on the average daily trading volume of each exchange.

Categorization:
Tier 1 Exchanges: Exchanges that exceed the daily trading volume of $70 Million;
This category includes only nine exchanges: Binance, Coinbase Pro, Huobi Global, UpBit, Kraken, Bitfinex, Bitsamp, Kucoin, and HitBTC.
Tier 2 Exchanges: Exchanges that range between $15–70 Million;
This category includes 31 exchanges such as Okex, Bithumb, Bitforex, Coinone, Bittrex, etc.
Tier 3 Exchanges: Exchanges which have their daily trading volume below 15 Million;
These exchanges include FCoin, BiBox, CoinBene, etc. Some of these exchanges reported their daily volume to be non-existent.

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Forex Educational Library

Centralized Exchanges And Decentralized Exchanges

Introduction

In this editorial we are going to discuss decentralized exchanges, why they exist or why are they going to exist, what are the advantages, what aren’t people still using them, and we will have an overview of the current projects that are striving to solve these problems.

Centralized exchanges

Let’s start off with explaining how normal (centralized exchanges) work and what’s their purpose. This will serve as an introduction to the problem which decentralized exchanges tend to solve.

Centralized exchanges act as a third party matchmaker between a buyer and a seller of an asset. They are useful because they provide liquidity. What is also important is that this process of trading is speeded up by the convenience of having an account in which you have you deposited funds, which are held by the exchange.

What is liquidity?

>Liquidity describes the degree to which an asset or security can be quickly bought or sold in the market without affecting the asset’s price.

Market liquidity refers to the extent to which a market, such as a country’s stock market or a city’s real estate market, allows assets to be bought and sold at stable prices. Cash is considered the most liquid asset, while real estate, fine art, and collectibles are all relatively illiquid.

Accounting liquidity measures the ease with which an individual or company can meet their financial obligations with the liquid assets available to them. There are several ratios that express accounting liquidity highlighted below.

Source: investopedia.com

The most popular examples of centralized cryptocurrency exchanges are: Coinbase, Kraken, Cex, Bitfinex, Poloniex…

In the cryptocurrency market exchanges are often divided into two types: fiat-crypto gateway (BTC/USD, ETH/USD, LTC/USD…) and altcoins (BTC/ZRX, BTC/DNT, ETH/ADA…)

This is important to point out because later we will discuss some common problems associated with decentralized exchanges (DEX) that are caused by these points.

Decentralized exchanges

Unlike centralized exchanges, DEXs aren’t owned by anyone. Instead, they are constructed on the same distributed ledger technology as Bitcoin and utilize smart contracts for order execution. This is important to point out, as this means that they do not hold funds for their beneficiaries or any other relevant information regarding the identity or location.

Some common examples are: Etherdelta, IDEX, Radar Relay.

Problem – Solution

Centralized exchanges are charging high fees, which is something cryptocurrencies strive to eliminate. They can be hacked which happened numerous time in the past.  They have the ownership of your funds, which is something that’s not aligned with the advantages of cryptocurrencies in general (cryptos take pride in the part that people have control of their own money). Crypto-unfriendly governments can cut or ban their operations. For all the above reasons they are viewed as the weakest link in the cryptocurrency market ecosystem.

That’s why decentralized exchanges are offered as a solution to the listed problems. They cannot be hacked, they cannot be tampered with, they are censorship resistant and do not hold your funds.

While DEXs are more beneficial when it comes to security (from hackers and government interference), anonymity and cost, there are still great challenges that they need to overcome in order to compete with their centralized competition. They are still difficult to use for the common person, as you would have to be crypto/tech savvy; they are somewhat limited in functionality and/or limited on the type of a cryptocurrency (for example only ERC20 tokens), and most importantly they don’t guarantee liquidity.

Having liquidity and a large trading volume is most important because we as traders are all about fast execution. And if you have to wait for hours for your order to get filled, by the time you might get fill you aren’t potentially looking at a good buy or sell opportunity.

Because of this, DEXs haven’t been much used, compared to their centralized counterpart. But there are projects out there that are going to solve that problem as well. In the following paragraphs, we will review most promising DEX projects.

0x Protocol

0x is a protocol. That means it serves as a layer on top of the Ethereum blockchain for actually building decentralized exchange applications. They describe in their whitepaper that 0x is “a protocol that facilitates low friction peer-to-peer exchange of ERC20 tokens on the Ethereum blockchain. The protocol is intended to serve as an open standard and common building block, driving interoperability among decentralized applications (dApps) that incorporate exchange functionality. Trades are executed by a system of Ethereum smart contracts that are publicly accessible, free to use and that any dApp can hook into. DApps built on top of the protocol can access public liquidity pools or create their own liquidity pool and charge transaction fees on the resulting volume.”

OmiseGo

OmiseGO is a project that incorporates many things, but having in mind the focus of this editorial we are going to point out their dex platform.

“OmiseGO is building a decentralized exchange, liquidity provider mechanism, clearinghouse messaging network, and asset-backed blockchain gateway. OmiseGO is not owned by any single one party. Instead, it is an open distributed network of validators which enforce behavior of all participants. It uses the mechanism of a protocol token to create a proof-of-stake blockchain to enable enforcement of market activity amongst participants. This high-performant distributed network enforces exchange across asset classes, from fiat-backed issuers to fully decentralized blockchain tokens (ERC-20 style and native cryptocurrencies). Unlike nearly all other decentralized exchange platforms, this allows for decentralized exchange of other blockchains and between multiple blockchains directly without a trusted gateway token.”

Source: OmiseGO whitepaper

Airswap

Airswap is similar to 0x in a sense that it will allow users to exchange only ERC20 tokens, and in a sense that it’s a consensus project. The difference is that the transaction on Airswap happens off the chain.

“We present a peer-to-peer methodology for trading ERC20 tokens on the Ethereum blockchain. First, we outline the limitations of blockchain order books and offer a strong alternative in peer-to-peer token trading: off-chain negotiation and on-chain settlement. We then describe a protocol through which parties are able to signal to others their intent to trade tokens. Once connected, counterparties freely communicate prices and transmit orders among themselves. During this process, parties may request prices from an independent third party oracle to verify accuracy. Finally, we present an Ethereum smart contract to fill orders on the Ethereum blockchain.”

Source: Airswap whitepaper

Kyber Network

Kyber network is my favorite project as they tend to emulate the exact same functionalities and user experience as centralized exchanges.

We design and build KyberNetwork, an on-chain protocol which allows instant exchange and conversion of digital assets (e.g. crypto tokens) and cryptocurrencies (e.g. Ether,
Bitcoin, ZCash) with high liquidity. KyberNetwork will be the first system that implements several ideal operating properties of an exchange including trustless, decentralized execution, instant trade and high liquidity.

The only thing that’s different is that they don’t have the order book in order to finally solve the liquidity issue.

Instead of maintaining a global order book, we maintain a reserve warehouse which holds an appropriate amount of crypto tokens for purposes of maintaining exchange liquidity. The reserve is directly controlled by the Kyber contract, and the contract has a conversion rate for each exchange pair of tokens by fetching from all the reserves. The rates are frequently updated by the reserve managers, and Kyber contract will select the best rate for the users. When a request to convert from token A to token B arrives, the
Kyber contract checks if the correct amount of token A has been credited to the contract, then sends the corresponding amount of token B to the sender’s specified address. The
amount of token A, after the fees, is credited to the reserve that provides the token B.

Source: Kyber Network whitepaper

Conclusion

Having experienced these problems of centralized exchanges early on, cryptocurrency ecosystem has already come up with the solution – decentralized exchange applications. They are still far from perfect but as you can see from these promising examples, some major obstacles are already being solved as well. First generation failed but offered a great insight on how and where to look for progress. That’s the beauty of the free market – problems are being solved and those who can’t compete are left behind.   

Final note

The greatest threat of centralized exchanges aren’t the reasons I’ve listed. The greatest power centralized exchanges have is maker manipulation. They collect so many cryptos through fee’s that they can manipulate the price in many ways. They also have awareness of the order book flow that they can use to their advantage.

Something like that happened on October 8. last year on Bittrex exchange. Even though they denied the accusations of market manipulation, the research done by The CryptoSyndicate Research Lab paint a different story.

For more check out the original post:

https://thecryptosyndicate.com/opinion-bittrex-anomaly/

In the spirit of decentralization which cryptocurrencies carry and promise, in order to achieve taking power back from centralized entities, decentralized exchanges are emerging widely. It is up to us to choose what’s best for us, so I have not doubt in my mind that DEXs will become a new standard in the near future, but only after they offer easy user experience and liquidity.

Having said that, and having in mind the projects that are already out there, “near future” may be sooner than we think.

©Forex.Academy