Waves Blockchain platform, host of the recently held Trading in the era of Robots and Bitcoin in November 2016 at its Digital October Center office is exploring some of the developing trends in the cryptocurrency trading arena with an intention of capitalizing on them. Sasha Ivanov, the CEO of Waves platform is leading the initiative.
A Brief History of Cryptocurrency Trading
The history of cryptocurrency trading dates back to the day Blockchain based money was introduced. The concept of Bitcoin was introduced in 2008 followed by the network’s launch the next year. The first Bitcoin exchange, Mt Gox started its operations in 2010, which went on until February 2014 before it closed down due to series of management and security issues. Mt Gox’ loss was indicated to be around 850,000 BTCs, which was revised later after 200,000 BTCs were found in an ‘old format’ wallet. Since then, cryptocurrency exchanges are always under a constant threat of being hacked. Bitfinex, the latest exchange to get hacked lost around $70 million back in August 2016.
Despite the risks, many traders continue to be attracted to cryptocurrency trading due to the earning potential it offers. Ivanov explains that the crypto market is inefficient; opportunities for arbitrage exist between exchanges, and the market is very volatile and unregulated with a constantly shifting landscape.
Regulation and Efficiency
Ivanov believes that the cryptocurrency market will move in the direction of greater regulation and efficiency. Arbitrage opportunities will gradually disappear paving way for high-frequency trading and platforms for trading stocks – similar to existing ones will arise, but on the Blockchain. It will also lead to the emergence of ETF like trading funds.
The application of Blockchain technology to these markets is currently in its infancy, but there are many opportunities. Markets that have already been established on the Blockchain typically do not enable trading with sufficient speed, though they can provide transparency and decentralized trading. Nasdaq’s Linq project is one such example. Furthermore, distributed registry technology allows the combination of processes of interaction between the exchanges, brokers, depository, clearing systems and clearing houses. Blockchain can save time by speeding up typically lengthy processes, but more important than speed is transparency.
The Waves platform will play an active part in these developments by removing some existing barriers. The coming DEX (decentralized exchange) will allow anyone to have access to exchange facilities, whilst paying low fees – a far cry from the experience of many people remitting money today, or even changing currency on holiday. Any currency, security or commodity can be traded against any other, subject only to two parties agreeing to it over a system of order matching and settlement built on the Blockchain, Waves will provide the speed of traditional crypto trading engines, whilst keeping the security benefits of a peer-to-peer system.
Ivanov sums up with a series of conclusions and predictions for the sector:
- The cryptocurrency market is currently very inefficient, offering opportunities to earn from it. Arbitrage bots can be particularly effective.
- Securities transactions will be carried on the Blockchain. Exchange transactions will be carried out with the help of smart contracts and the need for IPOs will be markedly reduced.
- Blockchain-based settlement and clearing systems will be developed.
Waves recently launched full nodes and custom application tokens (CATs), which allow anyone to create and send their own tokens. These will be the foundation of fiat and securities tokens on the Blockchain, provided by gateway financial organizations.
- OpenLedger’s Apptrade (www.apptrade.io), the platform creating “Kickstarter for Apps on the Blockchain”, has received a $100,000 USD boost from OpenLedger ApS, the world’s first blockchain powered conglomerate. Powered by the digital token APPX, Apptrade creates portfolios, or groups, of apps, where if one of those apps becomes the next Instagram or Angry Birds, then the value of the portfolio rises. Ronny Boesing, CEO of OpenLedger ApS, explained that Apptrade’s initial token offering (ITO) changed its valuation in the middle of its crowd sale as an immediate response to the result of its preliminary offering. Boesing said, “The Apptrade platform is much too important to not succeed, and it was clear that we needed to adjust the valuation to make it more appealing to anyone deciding to participate. In addition, we wanted to show our belief in this project, and felt that there was no better way to show this than putting our money where our mouth is. OpenLedger will be adding a total of $100 000 USD to the Crowdsale over the next 7 days.” The minimum fundraising goal is $1M USD with a cap of $5M USD. With a total of 8.25M APPX tokens on offer, OpenLedger’s Apptrade ApS will back these tokens with 20% of the future revenue from the Apptrade platform, and any unsold tokens will therefore be distributed proportionally to all participants. All early bird participants, as well new participants, will receive the extra tokens according to the published Stage 1 structure, plus benefit from the additional tokens to be divided. Daniel Pineda, Founder of Apptrade says, “After listening carefully to feedback from public and private supporters, and with great consideration, we decided to update our master token valuation. We firmly believe that our platform, built on the ecosystem of OpenLedger and powerful BitShares financial trading technology, is a strong Blockchain project that will be a success for years to come. We feel that this is the right action to ensure a satisfactory outcome for all.” Apptrade’s final valuation is going to be based on the amount raised, whether $1M USD as its threshold or money back guarantee, or the maximum of $5M USD. The valuation of the Apptrade platform will be determined on what is raised. The deadline according to the escrow agreement is set to end on April 30 2017. Boesing continued, “This approach and change of valuation resulted from requests from within the community, and we hope to accommodate many more participants. But one thing is clear to all of the Early Birds – this is your lucky day!” - March 27, 2017
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