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How does Cryptocompare work? Complete insights

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How does cryptocompare work

Understanding the actual math behind the price indexing by Cryptocompare

 

Introduction to indexing

Cryptocurrency index is the most engaging tool one can apply in order to get a brief idea about the current state of affairs. There are almost more than thousands of cryptocurrencies which have been developed, with Bitcoin being the most dominating one. All these circumstances only lead to a conclusion that both the private and institutional investors are going to, no sooner depart from cryptocurrencies.   

 

Importance of indexing

Regardless of the type of investors, they are finding it challenging to choose the right cryptocurrency portfolio in order to optimize their returns on investment. The best strategy one can apply is cryptocurrency indexing. Technically, indexing is the process of optimizing the disk space utilization whenever a query is processed. However, according to financial terms, indexing is the best strategy a private investor can apply in order to gain stabilized return of investment on a long-term basis.

It is nothing but an allocation of the financial assets that the private investor is looking forward to investing in, in his portfolio, in a systematic manner so as to stabilize everything. The movement in the cryptocurrency market, like any other traditional market, completely depends on the mindset, values, beliefs, and goals of billions of people around the world on the market and hence evaluating each and everyone’s goal and aggregating them to predict the market conditions by an individual is almost impossible.

 

CryptoCompare

There are a number of traditional stock market index providers which use professional methods in order to give their users, a concise condition of the market, like German DAX, the Dow Jones, the British FTSE 100, etc. On the other hand, in cryptocurrency space there are only a handful of cryptocurrency index providers and the most preferred one is CryptoCompare.

It is one of the most interactive discussion platforms which is even specialized in providing the users with real-time information in the current market streams. Cryptocompare was founded by two cryptocurrency enthusiast namely Charlie Hayter and Vlad Cealicu, both the visionaries left their full-time job in November 2014 when they received fundings for the project.

An effective cryptocurrency index is provided by cryptocompare for most popular cryptocurrency coins like Bitcoin, Bitcoin cash, Ethereum, Ripple, Litecoin etc. As each investor has his own goals towards them, and developing a cryptocurrency index might not please all the investors. Daily trading volume is the key concept they consider before averaging the price of a cryptocurrency from an exchange. The cryptocurrency exchanges which the company uses must have a sizeable daily trading volume. Apart from considering the objective metrics, subjective metrics are also taken into account as to how reliable and trustworthy the cryptocurrency exchange is.

If a particular cryptocurrency exchange doesn’t seem to be reliable and worth enough to be included, is not included, to calculate the aggregate price of a designated cryptocurrency coin. But the trading volume from all the cryptocurrency exchanges is considered regardless of its size of the trading volume.

 

Calculating the price index

Volume Weighted Average Price (VWAP) is the paradigm that the indexer for CryptoCompare uses. The past 24-hour trading volume is considered by the indexer. For example, considering two exchanges X and Y, if an exchange X has 60% of the trading volume in the past 24 hours then the aggregate index is calculated as follows.  

Index = (last trade on X)*0.6 + (last trade on Y)*0.4

 

Calculating the percentage of trading volume

In order to calculate the percentage of trading volume for a cryptocurrency exchange among the total. The crypto exchanges which were used for price calculation are only considered even here. For practical reasons, when a particular cryptocurrency exchange goes offline which means that no trade happens for a particular duration of time, then lesser priority is given to such exchanges depending upon their ideal time. Hence cryptocurrency exchanges with high ideal time are given lesser preference automatically.

 

reduction =(Over 5 Min:0.8 ,Over 10 Min:0.6, Over 15 Min:0.4, Over 20 Min:0.2, Over 25 Min:0.0)

 

For illustration, if an exchange has been ideal from 15 to 20 minutes then only 40% of its trading volume is considered. This effectively rules out the price uncertainties.

Professionals at cryptocompare even make use of Open High Low Close (OHLC) charts in order to assess the precise market price. The preeminent and also the most undervalued cryptocurrency is taken into account.  

 

Conclusion

Although the cryptocurrency index providers provide real-time data there are some bottlenecks. The real world cost of slippage, impracticality for the investors to adjust their portfolios according to the changing market, also the intermediate commissions, taxes, along with the transaction fees are exempted.

#Ethereum

Ethereum Updates: Proof of Stake, Zero Proof Prototype, JP Morgan and more

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The Ethereum Dev Con in Prague has just wrapped up in a flurry of news and announcements. Vitalik has made some tantalizing announcements about ethereum.

The Ethereum Devcon in Prague has just wrapped up in a flurry of news and announcements. Vitalik Buterin has made some tantalizing announcements about ethereum stating that Proof of Stake is not far away. The serenity updates will see Ethereum moving from a Proof of Work to a Proof of Stake system which will be exciting.

Estimates predict a possible 1000X increase in ethereum speed brings it up to 15000 transactions per second. The updates will also include improvements to the ethereum virtual machine, cross chain contract logic and much more.

 

Ernst & Young ETH Zero-Proof Prototype

Ernst & Young made an announcement on 30th October about the launch of EY Ops Chain Public Edition Prototype which is the first ZERO Knowledge Proof Technology on Ethereum Blockchain. According to sources, the prototype aims to improve the current barriers that prevail in the transactions.

– Company’s ability to conduct transactions on the Public Blockchain securely.
– Improving Blockchain Adoption
– Enabling a traceability trail of the private transactions.

The prototype is set to launch in 2019 and could prove to be highly significant for the upcoming security token industry.

 

JP Morgan ‘big believers’ in Ethereum

Jamie Dimon, the CEO and Chairman of JP Morgan who had earlier said that he did not give a s**t about Bitcoin has recently endorsed Ethereum of having the abilities to provide practical applications to the financial world.
The JP Morgan team is developing a product named as ‘Quorum’ which is defined as an enterprise-focused version of Ethereum. A significant use of the product will be the tokenization of gold bars.

 

Bancor: Ethereum and EOS Cross-Chain DEX

BancorX, a new platform by the Bancor decentralized exchange is now live and enables the conversion between ethereum and EOS based tokens on the blockchain. Currently, it allows the conversion of more than 110 tokens on both Ethereum and EOS blockchain. The BancorX project was established in collaboration with LiquidEOS, an EOS block producer. The project uses BNT tokens (Bancor Tokens) for the transactions. The BNT Token works on both EOS and Ethereum blockchain.

The working: When you convert an Ethereum token into an EOS token, it is first converted into BNT Token. After this, the BNT Token is transfered to the EOS blockchain and gets converted into an EOS Token.

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#Blockchain

How Blockchains are being implemented in Supply Chain Management

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A blockchain technology investment can be a turning point for supply chain and the reorganization of infrastructure and certification of trust in commerce.

Blockchain refers to a dynamic database which takes records of all events or data on a digital basis. It does this in a way which makes it impossible for interference. Blockchain users might have tried to at some point add to the data, access it or even scrutinize it. It is, however, unlikely to delete or change any data. This implies that the first and original data stays the way it is. Therefore, there is a constant trail of transactions information which is available and accessible to the public.

In contrast to conventional tools, blockchain transactions are not controlled by any organization. Blockchain operates on a record-keeping basis which ensures ease and security for businesses to carry out various sales and deals over the internet. Originally, blockchain was designed to carry out financial transactions.

Now, all forms of businesses are utilizing the blockchain ledger. This blockchain ledger is useful for purposes such as Verification, tracking and recording anything which has value. If the whole blockchain were a record of all transactions carried out in banks, then the bank statement of an individual would be just one block in the chain. Blockchain technology provides the easiest and safest way for companies, organizations, and businesses to complete transactions.

 

How Blockchains Impact Supply Chain Management

A blockchain technology investment can be a turning point for the reorganization of infrastructure and the certification of trust when in commerce. It is said to be the technology which will take us into the next industrial reformation. This coming revolution will see to the change in the mode of transportation, finance, supply chain and a host of others.

The supply-chain management is also known as supply network. This supply network involves a data collection of people and goods that participated in the trading process. It also consists of the record of the transportation or movement of the product from the manufacturer through the various networks and links, to the final consumer who needs it.

Several years back, the supply chain model was simple, and it was an easy walk-through because business operations were consummated locally. Taking a look at the supply chain in today’s world, it can be said that bureaucracies are the order of the day. The creation and distribution of goods are very complex. It is possible for the supply chain of a product to go through several stages, settings, accounts and the likes. It could also involve multiple individuals, and it could expand over a period.

The long-drawn processes involved in the supply chain make it a somewhat complicated process with several parties. It is quite difficult to trace illegal activities when the supply chain is very complicated. So, it is possible for events of this sort to go on for a very long time without the knowledge of anybody. Blockchain technology has the potential to bring great transformation to the supply chain.

 

How Blockchains Can Enhance the Supply Chain

Blockchain technology gives room for tracking all forms of transactions securely and transparently. The best cryptocurrency exchange platforms around the world have demonstrated how efficient the blockchain can be. This could also be replicated in the supply chain. Anytime a product is up for sale; the transaction will be recorded as it goes through the necessary channels. This trail is permanent, and it stands for the product’s stable history

This innovation would help to reduce time lag, additional costs and possible human errors which are likely to occur in a conventional everyday transaction. Some supply chains are already utilizing this technology. Financial experts and analysts have previously predicted that using blockchain technology could facilitate a universal supply chain system.

Regarding recording, the number of assets and their transfer and movement within the supply chain would be documented. It is impossible for the records on blockchain to be erased, and this ensures transparency in the supply chain. Blockchain also provides that there is no disagreement on the chain, as all participating parties have the same sample of the ledger. This transparency also transcends to the lessening of fraud when it comes to goods which are highly valued. Such products include precious stones and drugs.

Companies can utilize blockchain technology to have a grasp on how every used item and the finished goods, passed through the entire process of manufacturing. So companies would be able to communicate better with the consumers by either decreasing the amount or eradicating the effect of sham products.

Also, when it comes to the tracking of essential details such as the purchase and delivery orders, blockchain technology can help. The same will suffice for the receipt and other documents involved commerce. Blockchain can effectively track down every detail. Organizations can make their physical assets digitized hence setting up a record of every transaction. As expected, each recorded transaction is accessible to all, and therefore all assets can be effectively monitored.

 

Integrating Blockchains Into a Supply Chain

For the successful application of blockchain technology in supply chain management, some factors have to be set in motion. First and foremost, the companies and organization involved must have a grasp of possible risks. This is essential because all the weak points would be noted and plan to contain them would be made up.  This is a retorted line of thought when new programs, software or processes are under implementation in an ecosystem,

The most likely set of plans will be able to spot the weak points in the resultant use of blockchain technology. Now, companies and organizations need to commence basically by first applying these solutions to the weak points. Once this is seen to be yielding positive results, then further application can be made to other aspects. Many change agents will implement a walk-through test to be sure that the expected results are seen.

For a company or an organization to achieve success with the use of blockchain in the supply chain, there is a need for the company to first, set up a blockchain for the company internally. At first, everyone might not be used to it, as it is expected of new technology. However with time, everyone will commence its application, and progress would be attained.

Also, the company should ensure that all its contacts such as suppliers and the likes, participate in the blockchain movement. This collaboration is essential if proper transparency and easy-to-track procedures are in view. Again, it would surely be difficult to carry out, but possible to implement. However, as an organization, it is essential for you to partner with organizations who embrace any innovative technology.

Once this is completed, then every partaker in the supply chain can be involved since every data can be made available. Blockchain technology in the supply chain management is already gaining grounds in some companies. Those companies who have not started its utilization are encouraged to take a cue from their fellow field players who are already enjoying the benefits.

In the long run, if blockchain technology will afford us the opportunity of tracking all transactions. As a secured platform, it implies that the possibilities it possesses in the supply chain are limitless.

 

Author Bio:

Denise Quirk is a Health Advisor who is fascinated by Crypto and Blockchain Revolution. She is a believer in transforming complex information into simple, actionable content. She is keenly interested in finding the value of the crypto world. She writes for Coin Review, Bitcoin Warrior, Irish Tech News, etc. You can find her on Linkedin, Twitter, and Facebook.

 

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#Bitcoin

Economists: Huge Cryptocurrency Boom Predicted, US Dollar likely to fall sharply in 2020

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The increasing debt of the US Government which is currently around $21.7 Trillion will certainly cause cryptocurrency to rise sharply.

Erik Voorhees, The Chief Executive Office of Shapeshift Wallet and Exchange says that the increasing debt of the US Government which is currently around $21.7 Trillion will certainly cause cryptocurrency to rise sharply.

Erik said:
“When the next global financial crisis occurs, and the world realizes organizations with $20 trillion in debt can’t possibly ever pay it back and thus must print it instead, and thus fiat is doomed. Watch what happens to cryptocurrency.”

According to Eric Voorhees, the government will be forced to print the excessive amount of currency to repay the debt and thus this will surely lead to a hyperinflation eventually leading to the fall of USD.

 

Financial Institutions in great anxiety

BlackRock Investment Management Company which is the world’s largest asset management firm expressed its concerns in relation to the fast-growing debt of the US government.

BlackRock Chief Executive Officer Larry Fink expressed his concern stating that:

“That could be the real issue related to everything: where we have interest rates becoming too high to sustain the economy with its growth rates.”

A large number of financial economists predict that a major financial crisis is going to occur in 2020 because of the rapidly increasing interest rates of the US Federal Reserve and that this will surely lead to a rapid decrease in the value of USD. Economists believe that in such a state the people are likely to invest in assets such as gold and cryptocurrency that are independent of the global economy.

As ten years have passed from the day bitcoin came into existence, Vinny Lingham the CEO of Civic Blockchain expressed that the next ten years will be more wealth generating than the previous ones.

 

What do you think about the upcoming predicted financial crisis and how do you think cryptocurrency will play a major role in tackling the same? Tell us in the comments section below.

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