In this network, different developers across the world can create applicationsand software.

As a blockchain developer it is necessary to know some programs.MistMist is available for Windows (32 and 64 bit), Mac and Linux (32 and 64 bit) devices.

Mist, is the portfolio developed by Ethereum managers, it is a portfolio of nodes that involves the full download of the Ethereum blockchain.

GethGeth is a program that works as a node of the Ethereum blockchain.

With the Geth program we can: Transfer tokens between the different addresses between users, check a block archives.

Despite the introduction of ICOs 5 years ago, fund raising using ICO didn’t gain traction until 2016.

Subsequently, 92 major ICOs raised over $1.25 billion in 2017.

A study by Statis Group, an ICO advisory firm shows that 80% of the token sales in 2017 were scams.

They don’t fall under the regulated securities trading space.

China, for example, banned Initial Coin Offerings in the country citing that scammers could use them to defraud investors.

So are regulators helping or hurting ICOs?

When it comes to crypto currency, a wallet that helps to load and use such currency is also required.

This is a software application that helps to store private as well as public keys and can interact with different Blockchain technologies which enable users to send or receive different kinds of digital currency as well as be able to monitor the balance they have.

For those who use Bitcoin or other forms of crypto-currency will need a digital wallet alongside as well.How crypto currency wallets work?Though crypto currency wallets are varied and many people use them, many are unsure of how these wallets work.

In such wallets currency is not stored or to be found to lie around.

A person can send another Bitcoins or other forms of digital currency and that is akin to signing of ownership of part of the coins from one’s wallet which is akin to an address.

The coins that are sent across or the funds that are unlocked can be spent only when the private key in one’s wallet matches the public address of the currency that has been transferred.The transactions that happen are merely records of transactions that are maintained on the Blockchains and reflect on the balance of one’s wallet for crypto currency.Different kinds of crypto currency walletsThere are different kinds of crypto currency wallets out there that have the following features:OnlineThis category of wallet usually runs on cloud and can be accessed by any computing device.

What Poloniex Exchange Offers You?

As per definition this is a crypto currency based global exchange which operates out of US. This exchange is registered under Financial Crimes Enforcement Network or FinCen and categorized as a money service business that has been operating since 2014 and gained legitimate status in 2016. The exchange has a registered office in Wilmington, Delaware. The company website called Owler shows CEO and founder’s profile which lends credibility to the exchange as users can gain necessary information about the company running operations in the background and know details about its functions as much as they wish to.

What makes Poloniex unique?

In the world of crypto currency exchanges this exchange has established itself as the largest in Ethereum trade. For those who are looking for trendy and new coins in the trade they can certainly sign up to trade on this exchange. Useful features are as follows:

• The exchange platform is built for serious crypto trading as there are detailed charts provided as well as useful data analysis tools.
• The trading interface code is client sided and open source that allows enthusiasts to examine closely as well.
• There are around 70 kinds of digital assets to trade with.
• Charges for the deposit as well as withdrawal are low and competitive in the industry.
• Security in the form of full refund for users in case security is breached.
• An Active community forum where one can get their queries answered promptly.

Limitations of the exchange

There are certain aspects of this crypto currency exchange that need to be worked upon to improve their services such as:

• Often users state that withdrawing their funds from the exchange is difficult.
• Management of private keys is centralized that exposes funds to risks of exposure as many other crypto currency exchanges offer decentralized alternatives.
• Fiat currencies cannot be deposited in this system.
• Identities of investors and managers on this platform are not revealed through community interviews or blog articles which reduce the credibility of the platform.
• Users are asked for identity verification for large volume activities.
• Slow and downtime issues are often reported.

Performance of the exchange

This crypto currency exchange has performed well from the time it has been operating. The trading volume is highest in the industry. The website of this exchange gets about 50 million visits every month. The closest competitor to this exchange is Coinbase that gets around 45 million visits every month. The exchange has popularity in countries like Vietnam, Russia, US, UK, Brazil and others. Another distinguishing feature of this exchange is the lack of support of fiat currency. Many users feel that it makes this exchange exclusive and also frees it from government regulations for this very fact. The large number of crypto currencies and similar assets that it allows trade in is another great feature of the exchange.

The user base and market share of the exchange has increased over the years as its rival exchange Cryptsy has closed operations. Even though there is no separate mobile app for the website, but the mobile compatibility of the website is high which ensures that users will not have any problem using the exchange on their phones or tablets. An API that is available for the exchange ensures that third party developers can conduct account management and data analysis of the site. The site has several useful features to offer such as margin trading, crypto currency conversion and so forth. The signing up process on this site is also simpler as compared to other exchanges.

Security features

The private keys to wallets that hold crypto currencies of the users are controlled by the exchange in its centralized manner of operations. The exchange assures the users that their deposits are stored in the air gap characterized cold storage and offline places. The account holders are encouraged to activate two factor authentications for their account as well as use tools for browser recognition.

When it comes to security breach, some minor incidents have been reported such as one in the year they started operations as in 2014 when about 12% of the deposits of the users were found stolen. Users were reimbursed subsequently by the exchange. Though founder information is not easy to find on the exchange or physical offices, users can bank on larger volumes of trades conducted over the years as a sign of their intent to be true and reliable to the users. It is advised that users should send across their excess funds to a wallet platform where one has greater control.

User feedback

This is another aspect of this exchange that showcases reliability. Feedback from users is vital for those who wish to register and use the exchange for the first time. Most users state that the interface of the exchange works smoothly except for certain heavy trading times when downtimes have been experienced. The users are prompted to ramp up security features of their web browser when they start trading on this platform. The exchange is known to revamp security and website interface features from time to time that keep up the interest of the users as well as make trading secure and easy. Some users often state that deposits take a long time to reflect in their trading accounts. The customer care response team is another drawback that many customers point out. There is the absence of a sound ticketing system for the website as well.

To summarize

The large trading volume that has ensued on this platform showcases dependability of the platform. Those who are hesitant to trade on this platform could also put up crypto currencies for lending and earn interest through this platform. The low fees that the exchange charges makes it a popular trading platform for most. The centralized operations are the only point of concern for many as their private keys are regulated by the exchange. However, one can rely on profitable trading activities that they will find on this platform if they sign up for it and maintain the necessary precautionary measures.

BLOCKCHAIN HELP

The staggering growth in Blockchain technology has brought efficacious changes in IT industry in a short time period.

And now it’s inevitable for every business and companies to realize the significance of blockchain along with how this technology can rapidly improve your business revenue without changing their essential business models.Moreover, many people are not aware of the concept of Blockchain.

They are still in a dilemma that what is Blockchain and other work related fundamental challenge.A Blockchain is described as digital distributed public ledger capable of recording transactions in a permanent and transparent way and it is secured by cryptography.

In other words, it is a method of recording data so its accuracy cannot be disputed and its security cannot be compromised.

Another main feature of a blockchain is that it is distributed - by this; we mean that it is not present in one place but spreads by a peer-to-peer network.

There is a need to create consensus consent for 'block' in the new network, or record, which can be added to the ledger.Now the question is how this technology will affect the businesses revenue?The first-biggest reason is that Blockchain has separated from the real world.

This crypto currency is not controlled by any government and there are no fees charged by any financial institution; Blockchain helps to record and create evidence of the transactions done with Bitcoin.

However, today it has been given legitimate status in many markets or regions for which its valuation has been on the rise, also because of the limited supply of Bitcoin in the economy.The valuation of this crypto currency as on March 2017 was around $1268 which even exceeded the valuation of a single ounce of gold.

This leads to the concept of Bitcoin cash, which is another variant of the crypto currency.

Backed with Blockchain as well, this is a slightly more optimized value of Bitcoin though it is valued more or less equal to Bitcoin as of August 2017.This year also sees rise in Bitcoin price which is reaching record levels.

As at August 2017 the prices of Bitcoin trade were found to be at $4000 on an average.

The crypto currency is not without its volatile nature where it is often found to dip below $4000 which usually results from weekly price movements.

Wallet Development

Cryptocurrency is the future of legal tenders as we have been witnessing more and more online business platforms accepting it as a mode of payment. As we all know, the digital currency transaction is decentralized and not under the regulation of any financial body such as banks.

If this currency is not under a financial body regulation, how then would you save it? Where can it be kept? And how safe it is, keeping it there?

Cryptocurrencies including bitcoin and other alt-coins such as Ethereum, Ripple and others can be stored in what is called cryptocurrency wallet.

What then is a Cryptocurrency Wallet?

Just as the name sounds, it is similitude to the wallet you can easily carry around with you too. This wallet can be accessed anywhere, anytime, and any day ― whether to receive or send a cryptocurrency for the completion of any transaction.

The major advantage of the cryptocurrency wallets is that aside from protecting your crypto assets, they allow you to store different cryptocurrencies without running out of space.

To be able to spend or receive cryptocurrency assets in your account, you will be required to match your private key the public address the asset is signed of too.

Features of a Cryptocurrency wallet

Generally, the basic things a cryptocurrency wallet is expected to have and do include:

• Authorization of user
• Create private keys for user cryptocurrencies
• Allows saving and receiving different cryptocurrency
• Highlight balance
• Support QR code scanner
• Security and backup

Types of Cryptocurrency Wallet

Generally, wallets can be divided into two: online (hot) and offline (cold) wallets based on their server location. Literally, they can be divided into four categories which we will concisely discuss so that we can get on to how to wallet development.

Hot Wallets: These are digital wallet connected to the internet to store your cryptocurrency assets. Most cryptocurrency traders usually store some of their assets here for instant transactions and move the rest elsewhere as this wallet is not safe ― it is vulnerable to cyber attack. The wallets are installed on your phone.

Hardware Wallets: These are stored offline with devices like a USB connected to your gadget to access it while transacting online. The security in this kind of wallet is better than most of all other wallets.

Online Wallet: This is another hot wallet only that in this case, instead of installing the wallet on your phone, they run on cloud. You can access them anywhere, anytime, even when you are not with your gadget. As always with internet related software, they are also vulnerable to cyber-attack.

Paper Wallet: The paper wallet uses a private key generated by the wallet site which you can then print on a paper and scanned to complete a transaction. The use of this wallet was popular between 2011 and 2016, but most cryptocurrency investors are now avoiding it as it is not safe for use.

How Can You Develop Your Own Wallet?

Considering the description of the various types of wallet of explained above, and depending on your choice, you can decide to have your wallet development on a web browser (Online wallet), downloaded on your gadget (Hot wallet), or purchased as a device (Hardware wallet).

Step-By-Step to Wallet Development

MyEtherWallet

You will need to create an email address before you can use this wallet as it will be requested. Consider creating your email on platforms like Gmail, Yandex or any other provider you prefer.

• Enter www.myetherwallet.com into your web browser.
• Crosscheck you before launching. As a sign that you are on the right site, you should see a pop-up warning about visiting a phishing website.
• When on the site, you will see a displayed box requesting you to enter your password
• Ensure you miss characters here to create a strong password and it should be something you can easily remember.
• Click ‘Create New Wallet’ which is directly below the password box
• Download your keystore/UTC file and ensure it is safely stored where no one but you can access it. You can use a USB drive if you prefer.
• Finally, you will get your private key which is the most important key of all. Save it properly.
• Download a paper wallet for your key
• Now you have just completed your wallet development.
• To access your wallet, visit the site using the correct URL and log in using your private key.

GreenAddress

Go to https://greenaddress.it/en/ and select 'create wallet' to be prompted to the download page

Select your device Operating System version

Select “Create new Wallet”

A 24 words mnemonic will be displayed after which you will be prompted to write it down and securely save

Tick the box: I confirm my passphrase is saved & secured and I agree with the Terms of Service.

Then click on continue

To ascertain you have truly copied it, you will be requested to fill the missing words of the mnemonic

When done, scroll down to select verify

Then you will have a two-factor authentication page displayed. You can choose between using Email, GA, SMS, or Phone. (You can use more than one).

If you are using Email, enter your email address into the ‘Your email address’ field and click Enable.

You will receive a verification email confirming your two-factor authentication request. Copy the 6-digit confirmation code.

Re-open your GreenAddress App to enter the code, then click on Enable

A new window will be displayed prompting you to set a 4-15 digits number PIN

Or select ‘Take me to my wallet and skip all this!’

Finally, you will have a ‘Receive’ page displayed. 

You have just created a digital wallet!!

There are other platforms for your wallet development such as ImToken Mobile Wallet, Atomic Wallet, BRD Wallet, Mycelium and lots more.

Conclusion

Cryptocurrency wallets are software programs that allow crypto traders to store their private/public keys to for a seamless transaction. Irrespective of the wallet development method you decide, it is important to always remember to safeguard your wallet info especially the private key. Do lose them or share with anyone ― it is your sole access to your digital assets.

 Bitcoin wallets, Altcoin wallets, Cryptocurrency

Meanwhile, in a market where there is the minimum supply of a particular coin, it will be more costly.

By purchasing from the former and immediately sold on the latter, traders can suppositionally profit from the difference.

Those exchanges are not connected, and a low trading volume on a few exchanges can mean that the price listed does not fit to the exchange average instantly.

Trading bots will continue to emerge in cryptocurrency markets to meet trading needs and Especially once institutional investment starts entering the markets and the unpredictable and insecurity of manipulations are reduced, trading bots should begin to flourish with advanced AI and machine learning components.

However, there are many cryptocurrency arbitrage bots available online, designed to make it as easier as possible to find price movements and differences.

There are many strategies arbitrage traders can use to make a benefit, including the following:  Simple arbitrage.

Identifying the main problem you hope bitcoin will help to solve is the first step towards a successful blockchain development.

You will need to declare what transaction, maybe for your customers who usually receive money from other countries or those who transact in the shipping industry.Which “consensus model” is best for you?Before a block is allowed to be added to the blockchain network, users are required to prove their authenticity before they are allowed to participate in the blockchain network.

For example;Bitcoin platform is majorly for crypto-currency transactionsEthereum platform is targeted at smart contracts and is designed for different decentralized applications (DApps)IOTA platform was designed specifically for the fee-less micro-transactions of the Internet of Things.Also, check with your team to know the skilled personnel you have on-board to know which to settle for as more than one of the available platforms will be able to handle your purpose.How will the design be?Your blockchain can be hosted either on the cloud, in your preferred location (such as an office), or hybrid.

And you may want to choose of the four blockchain solutions;Permission LessUsed for purposes such as bitcoin and the other major cryptocurrencies ― anyone can become a miner of these platforms.PermissionedThese are used for governmental operations like tax collection and voting systems.PrivateSpecially used for internal contract management in sensitive industries such as hospitals.HybridIt is mostly by banks for sharing Know Your Customers (KYC) information.What are the components of a blockchain App?You have to be meticulous here because any mistake during the configuration of a blockchain application may be impossible to be corrected.

Some of the major components that you may need to incorporated include asset allocation, reallocation strategy, consensus model, address formats and signatures.Why would you need an API?

Some blockchain platforms offer users pre-built APIs but to better suit your purpose, you may need to create most of the APIs you will be needing for functions like storage and back up; executing smart contracts; and generating key pairs and addresses.

A centralized exchange typically works like a forex exchange where cryptocurrency transactions are processed hence facilitating the trading of different cryptos in addition to converting cryptosinto fiat currencies.

A centralized exchange provides a flexible interface between the virtual cryptocurrency economy and the real world economy.

While centralization was never a concept in the cryptocurrency world, it actually makes things simpler, and that’s why many people still prefer centralized exchanges over decentralized exchanges.Decentralized exchanges, on the other hand, put the control of crypto holdings and transactions in the hands of the users through peer to peer transactions.

It utilizes a blockchain system to match buyers and sellers.

Decentralized exchanges, therefore, don’t impose any fees and traders don’t need to provide personal information to third parties.

One of the most popular terms in the blockchain industry is Initial Public Offering (ICO), which is analogous to the conventional business Initial Public Offering (IPO). The major difference is that the latter is more dependent on venture capitalists for it to kick-off while in the case of ICO, anybody can sponsor ― the only requirement is for them to own a cryptocurrency.

What is ICO?

An Initial Coin Offering (ICO) is an innovative and unique form of blockchain-based financing mechanism, which involves the issuance of a start-up stake (token) on a blockchain in exchange for investors cryptocurrencies. The component of the transaction is handled by blockchain protocols known as smart contracts. A smart contract is automated to execute a transaction based on the set criteria agreed by any two parties involved in a transaction.

ICO is another business disruption made possible by blockchain. It has been the major means of funding for blockchain related startups since 2017 when it started attracting billions of dollars investments without any intervention of financial services personnel.

According to CoinDesk, in 2017, ICO funding totaled about $5.4 billion dollars and during the first two months of 2018 alone, ICO attracted more than $4 billion, a surprising increase. Up until then, ICO funding is usually below $20 million per month.

What is Token/Cryptocoin?

Token or crypto coin are the digital coins offered during an ICO and it is equivalent to shares offered in conventional business IPOs. When the smart contract executes, it allocates a token to an investor in relation to the worth of the cryptocurrency transferred.

Importance/Benefits of ICO

Some of the advantages of ICO for startup entrepreneurs include;

Easy Finance of new Projects

Most internet projects are open-source, which means their products can be freely used by anybody even without paying them a dime. Thanks to ICO, any blockchain related company (open-source included) can now source for to kick-off a new project without the need of moving around investors office to pitch their business plan.

It helps to build customer base

Users are the measurement of the success of any digital platform. When a company issues an ICO, most of the time, the new investors are given free access to the platform. This is another plus for a start as these investors will contribute to their number of users. Although IPO investors can also contribute and check on the company they invested in, their population makes the difference. In an IPO, a company can have two venture capitalists checking out the product while in ICO, there can be as much as a thousand.

It gets everyone involved

Conventional business investments such as IPO are retained for certain group of people with different name tags ranging from venture capitalists, Angel investors to mutual funds. With ICO, anybody, either you are not as rich as most of the venture capitalists, provided you have a cryptocurrency; satisfy with the ICO clause, you are good to go.

Allow access to funds worldwide

ICOs allows access to potential investors around the globe. The blockchain is a unified platform where citizens of all countries can voluntarily trade provided the nation’s law is not against it.

No taxation

Raised funds during ICO is not subject to taxation. The issue of taxation may occur when developers are trying to exchange received investment funds for fiat currency to start the financing of the project. If they are lucky to find a platform that has all they need and they could pay using the digital coin, the probability of being taxed is minimal.

Risks of ICOs

The following are to be considered by investors before exchanging their cryptocurrency for a token in a company;

No Guiding Rules and Regulations

Just like the cryptocurrency platform which has no authority body controlling it, the ICOs too is not regulated by any financial body to ensure a thorough regulation. There have been reported ICOs scam such as the case of Pincoin and iFan which allegedly scammed about 32,000 people of $660 million. Many government bodies are now stepping in to reduce the rate of frauds committed through ICOs. But there is a concern if authority bodies stepped into this platform, would it still remain anonymous?

Failure to Deliver

With the ease at which fund is raised, founders may become complacent leading to their inability to deliver as promised. And since there is no way to hold them responsible for such, they are able to walk away freely without any security agency on their trail.

To avoid any of the two risks of investing in ICOs as listed above, ensure you read through the business model, if it looks like a scam, then avoid it, do not be tempted by gratifying return. Blockchain investments should be treated like any business and not a Ponzi scheme.

How to launch an ICO

If you are considering a blockchain related technology which you believe will revolutionize the digital space and will like to raise funds through Blockchains using ICOs, read through the following guides;

Idea creation

Just as any business starts with an idea, to start an ICO launch, get your idea on paper. Share it with others to get more insight. You may even conduct market research to examine its success potentiality.

Getting a team

When you have a well-developed idea, assemble a team to help you with the dream ― depending on what you will need. Ensure they believe in the project to avoid future trouble for everyone. This can determine whether the project will succeed or fail.

Get to the Planning Table

You and your team should discuss how things will work out. Best ways to raise funds and how much you will need for the successful execution of the project.

Consult Experts

To avoid future catastrophes, it is advisable to discuss your plan with an expert or a present CEO in a related company to get an insight on how things should look like.

Create a Business Plan

Get all your ideas and discoveries on paper. Estimate what the future looks like and how you are planning to handle it.

Get a Lawyer

For proper valuation and registration of your company, you may need a legal adviser. Aside from that, a legal adviser could tell you if you are violating any law including Anti-Money Laundering (AML) or Know Your Customer (KYC) policy.

Promoting Your Token Sale

Now that all is set, you may proceed to launch your ICO on the blockchain platform of your choice. Marketing the release of the token is allowed too.

Showcase the Product

Since you are not a scam, you should be able to showcase the prototype of your product ― better before the ICOs announcement or immediately after. This will boost investors interest in your product.

Conclusion

Although there have been lots of reported ICOs scams, there are also many successful ICOs that has generated great ROIs for investors such as Ethereum ICO in 2014 which raised $18 million within 42 days. As at the time of launching, the token was priced at $0.43 but as at 16th of January, 2018, it worth $1,019.89 ― more than 237,083%.

Blockchain Help

Block ExplorerOur technical specialists come with extensive programming and blockchain experience, and can develop top-notch block explorers for you that will give you up-to-date information about blocks, addresses and transactions on the blockchains of your choice.We can customize the block explorer to display heights, age, number of transactions and size of the latest blocks as well as who mined it.We can also design it to provide the most recent hash and value out readings of the latest transactions.

We can include any other parameters that you may want to track.Blockchain Help, A leading Blockchain development company provides all solutions related to Blockchain technology and Cryptocurrrency.Blockchain Help

Your community could be customers of the same business, players of the same video game, followers of the same blog, attending the same school, or even members of the same volleyball team.If you have a community, you can have a cryptocurrency.It all depends on you.You will make all the decisions when it comes to your alt coin.

Don’t be vulnerable of other people managing business poorly.What will your coin be:Will it be same as a company stock?Will it have the same value as Bitcoin, Ethereum or Lite?Will it be used by customers for service credits?Will it be another way to track customer loyalty?Cryptocurrency Creating ServiceBlockchain Enthusiastic provides you advanced alt coin creating.

One of the services that we offer is innovative Cryptocurrency Creation Services.

Our great blockchain development experience will bring encompassing solutions for fully custom altcoin development.We are the Crypto creator that you have been looking forIf you have an idea, and are in a need of a custom development, you are in the right place.

It’s just the development service you need.However, our services are not limited to coin creation.

If your project is much bigger than just a coin, no worries, we make connecting to blockchain easy.Why Choose Blockchain EnthusiasticSpecialized SkillsThe most important reason why you want to hire crypto consultants is so you can gain access to a specialized skill set that might not be available in house.

If you were to ask any experienced crypto trader the one common factor that makes crypto trade both possible and profitable, they would be quick to explain that the market difference provides the gap for profit generation. For traders who wish to engage in cryptocurrency exchange without having to perform challenging tasks in exchange for crypto coins, the easiest and fastest way to make profit from this trade would be to exploit the market inefficiencies that exist today.

As it stands today, no crypto trade exchange offers the sale or purchase of cryptocurrencies at the same price as another exchange. And even on those rare occasions where they may be almost equal, these values change before a trade transaction is completed. The high volatility levels witnessed in the cryptocurrency trade realm has solely paved the way for cryptocurrency arbitrage exchange to be made possible across every zone where crypto trade is practiced.

Many individuals understand the market inefficiencies within regular stock trades, as well as their causes. For one thing, fiat currencies across countries differ, and this is highly influenced by the country’s financial situation. While these currencies may rise or drop occasionally, it is a rare occurrence, and one that does not affect the prices by highly significant prices. One wound think, therefore, that because cryptocurrency involves similar currencies across all borders, the market value would be more constant, but this is not so.

Factors Affecting Cryptocurrency Price Change

Various factors are responsible for the high rate of fluctuation associated with cryptocurrencies. These factors vary substantially across different exchanges, but have a common ground across the entire cryptocurrency entity.

No Identifiable Intrinsic Value

The value of all fiat currencies in existence today is determined by a measure of how much a unit of that currency can acquire or be weighed against. Government controlled currencies in that they are usually exchanged for tangible entities such as commodities or services. How these currencies are utilized can also be quantified through various means such as expenditure and investment books.

With cryptocurrency, there is no intrinsic value that has been placed into any crypto coin that exists. The market values within cryptocurrency exchanges are not determined by factors such as commodity value, revenue generation, or employment. Cryptocurrencies are strictly computerized, which makes it difficult to value them through traditional means. As a result, how individuals value cryptocurrency is not constant, thereby increasing the chances of volatility by a considerable margin.

No Central Regulation

As a market, cryptocurrency and cryptocurrency trade is an entirely decentralized activity. Starting from the Blockchain technology that runs cryptocurrency, there is no central form of control that has been attached to the market. Efforts by various governments to set regulations on these currencies have not only been deterred by the individuals within the market, but have also been difficult to implement due to the low traceability associated with the currencies.

Because cryptocurrencies lack a formal regulatory body, two factors emerge which encourage arbitrage in cryptocurrency exchanges. One factor is market manipulation. With the lack of regulation in cryptocurrencies, the creators of these currencies, as well as those who operate the exchanges for their trade, have the freedom to define their prices at whatever value they please, and this creates market inefficiencies.

Lack of regulation also discourages major financial institutions from investing in these currencies. These institutions depend extensively on regulation to ensure that the funds they invest into any venture has high probability of success and profitability. Without their involvement, it becomes difficult to gauge returns such as dividends and revenues in terms of cryptocurrency, which increases the overall volatility of the market.

Small Market Size

Compared to other traditional forms of currency, cryptocurrency has a very small market size due to its newness. A small market for cryptocurrency in turn results in big impacts from any small currency movements that are made within the market. The impact, especially on cryptocurrency exchanges, is noticeable from the shifting prices of altcoins as trade is conducted.

Aside from the limited market size, cryptocurrency markets are also skewed in their distribution. Most of the market wealth is owned by very few individuals – otherwise known as cryptocurrency whales – which gives them high control over various market factors, such as the price. The freedom to dictate prices of these currencies results in disproportionate power distribution, and therefore a highly volatile market price.

Small Order Book Size

There are many security risks that have rocked cryptocurrency exchange in the past few years that it has existed. The traders involved in crypto exchange are aware of these risks, and do not store their cryptocurrencies within the exchanges that they trade on. As a result, the wallets used in exchanges contain very little cryptocurrency supply, which in turn translates to small order books.

The occurrence of slippage is also very common within cryptocurrency markets. Slippage in cryptocurrency occurs when the expected price of exchange differs to a great extent from the prices which the trade is carried out. These situations are common in crypto trade, and are one of the greatest factors that facilitate cryptocurrency arbitrage exchange. When slippages occur, they result in small order books, which can adversely affect the prices of cryptocurrencies and increase market volatility.

Going with The Crowd

Due to the high risks associated with cryptocurrencies, most traders feel that there is safety in numbers. Furthermore, the analysis of cryptocurrency trade has revealed that the majority of participants are those who are young and inexperienced, and have been locked out of traditional forms of investment due to existing monopolies. Most of these individuals have no concrete skills on investment and financial planning.

Thanks to their inexperience and lack of capital, the millennial population associated with cryptocurrency tend to purchase digital assets on credit. Essentially, these are funds that they do not have, and will therefore feel a greater urge to protect it at all costs. Market plunges within cryptocurrency, then, reflects to a sizeable shift in market trends and interests. While these shifts are usually individual works, when they are quantified as a whole, they reflect on an inherent herd mentality that is associated with crypto traders.

As the crowd shifts from one currency to the other, there are significant discrepancies generated across currency values, which results in increased volatility and price fluctuations.

Crypto Exchange Price Manipulation

The success rate of the cryptocurrency exchanges that exist today is determined primarily by the amount of traffic that they are receiving, especially the financial traffic. The ranking of these exchanges in almost every survey boils down to the cash flow of the exchange within a give amount of time, usually 24 hours.

By default, the owners of exchanges with the highest amount of cash flow become the power houses for cryptocurrency, and thereby have the greatest incentive over the prices of the coins. If these owners decided to change the prices of the coins, there would be no objection due to lack of judicial or government oversight. If we multiply the effect of one price manipulation over hundreds of exchanges, then the volatility of the market increases immensely.

Proof of Work

The proof of work in cryptocurrency arbitrage trade refers to the mechanisms with which users who have no capital to invest can utilize in order to obtain cryptocurrency. Proof of work is mostly referred to as mining mechanisms, and can range from gameplay to other forms of tech-related operations.

The proof of work of a crypto coin can affect how it is valued in the market. If a coin requires very complex mechanisms in order to obtain it, naturally, it becomes rarer and unique in the eyes of traders. Thanks to that uniqueness attached to it, the coin’s value demand becomes higher, and in turn, the value of the coin increases noticeably.

Long Term Orientation

What most individuals may not know about cryptocurrency as an investment is that it is developed to be a long term investment plan. The nature of cryptocurrency trade does not allow short term investors such as retailers and other financial brokers to effectively make profits, a factor which is a high contributor to the market fluctuation levels.

The experienced traders involved in crypto trade are well aware that it is an investment for the future. As such, they are not afraid to gamble or cope with the market fluctuations that occur within the industry. Their willingness to shift from currency to currency across exchanges also contributes to how volatile the markets can be.

The Determinants of Cryptocurrency Prices

Evidently, many technical and business factors contribute to the high volatility of the cryptocurrencies in existence. Besides these factors, there are other non-technical issues which surround cryptocurrencies, and can affect the pricing of these currencies just as adversely as the technical factors. They include the following.

Public Sentiment

Because there are no formal mechanisms for determining the value of cryptocurrencies as digital assets, their values can be greatly undermined or overestimated depending on the public’s perception of the currency in question.

Consequently, the perception of the public is affected by various means. The press has had a lengthy influence over how traders perceive crypto coins, for instance. When the news of a particular altcoin is depicted as declining in the markets, the reaction of traders is usually to move away from that coin and invest in others. In the same way, coins that are depicted to be of great value have higher demand within the markets, thereby increasing their value.

Supply and Demand

Another area which can be tweaked by cryptocurrency owners to ensure that their coins perform better in the market is to manipulate the supply and demand areas of that coin. The mechanisms of supply and demand work in this sense: if the demand of a coin is high and the supply of the same coin is low, then the value of the coin increases. Conversely, if there is a high supply of these coins but a low demand of them, then the price of the coin reduces.

Exchange and cryptocurrency owners are aware of this social mechanisms, and may manipulate them at times so that they can roll in their favor, thereby creating a highly unstable market valuation.

Identifying Arbitrage Opportunities and The Use of Arbitrage Bots

The various factors listed above affect market value and, therefore, provide opportunities for arbitrage trading. For individuals to identify and exploit these opportunities, they will either have to be experts with experience, or they will have to implement arbitrage trading bots to run their operations for them.

The users who decide to practice cryptocurrency trade on their own have to look at certain areas of opportunities to maximize their chances of success.

Cryptocurrency Arbitrage Exchanges

Because trade occurs through exchanges, they provide one of the most efficient places to monitor in order to grasp arbitrage opportunities. As discussed, different exchanges offer coins at different prices. Furthermore, the fees associated with these exchanges vary considerably. Traders therefore need to sharply analyze the exchanges that they want to utilize in order to generate efficient trade strategies.

Sometimes, users who are new especially may find it difficult to identify the exchanges that perform well over a long span of time. It is not always advisable to go for the best performing exchanges, as these usually accompany a higher demand and, therefore, stiffer competition than their counterparts. With the use of arbitrage trading bots, users are more efficiently placed to identify exchanges that have not breached the market but have high profit potentials, and thereby place themselves better for efficient trade.

Countries Participating in Cryptocurrency Exchanges

Another effort which could be applied in arbitrage is to identify the countries which have implemented cryptocurrency within their financial strategies. For instance, two key players of cryptocurrency are South Korea and the USA. Price discrepancies across cryptocurrency exchanges exist to a high extent in these countries, thanks to surges in their supply and demand. By learning to maneuver these markets, users can easily exploit the arbitrage opportunities within them to generate profit.

Alternatively, the use of trading bots can be employed to further the analysis of markets in countries. There are various factors to consider when analyzing these markets, such as the stock performance and foreign exchange positioning of a country. If users utilize arbitrage bots to analyze, they will run a more effective analysis strategy for different fiat countries, and identify which currencies offer the best prices for sale and purchase of cryptocurrency.

Order Book Analysis

Order books are the record keepers for exchanges, and the ultimate measure of success for their performance. Traditionally, larger order books translate to higher rankings of an exchange and, therefore, higher interest by the users. However, large order books may not be as efficient for beginners in crypto trade due to high pressure for market penetration.

The use of cryptocurrency trade bots provides users with better tools for monitoring cryptocurrency arbitrage exchanges and determining which order books provide a constant trade evaluation. The algorithms built especially with artificial intelligence, such as the Bittrex bot algorithms, provide a clearer means for determining the most consistent order books and providing traders with the most efficient exchanges to participate in.

Risk Analysis

It would be unwise to enter cryptocurrency trade without being aware of the risks associated with it. As arbitrage is considered the main cryptocurrency profit strategy, most of the risks associated with it are in relation to the arbitrage trade sector.

One risk associated with arbitrage trade is the low liquidity levels of exchanges. Using an arbitrage trading bot, the analysis of these risks can be made easier and more accurate for the user. Users can then use the reports generated to make more informed decisions on the exchanges they choose to carry out their crypto trade within.

Another risk associated with arbitrage are the slippages that occur due to high price reductions. Bots like the Bittrex bot can more easily predict market slippages, as they deal with the technical evaluations rather than intuition. As such, users who utilize them are less likely to become victims of slippages, making their trade more secure.

Conclusion

The factors surrounding cryptocurrency trade can be viewed in two distinctive lights. For one, these factors provide an overview of cryptocurrency as a high-risk investment for any participants, and the instability associated with markets can deter its progression and adaptation into various important sectors of business.

On the other hand, users and institutions which identify tactical ways to maneuver these risks and even use them for profit are better placed for success in crypto trade. Furthermore, arbitrage as a trading strategy seems to thrive from the same risks that discourage newer traders in the market.

Thanks to advancement in analysis software and other technologies, users can now rely on arbitrage trading bots to a great extent within trade exchanges. However, they must also keep an eye on these bots to provide that human-machine collaboration that results in higher chances of success.

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