A KCS large three years witnessed the strange status of coin ring

Rhythm note: the author of this article is an ordinary investor in the industry, is also a large KCS kuiping Taiwan dollars, from his perspective, we can see an ordinary investor on the waterfall market thinking, which"On the proliferation of derivatives, privacy and anonymity are worth pondering for those of us in the so-called industry.

The bitcoin crash on March 13 was the first time for me to experience since I entered the currency circle in 2017. The "anti-vulnerability" and "black swan event" that I often talk about happened in this way, and I just want to say "see you later".

After a blow, miners, miners, trading platform, the media, investors are all scarred, the digital currency market is in ruins, currency vulnerability exposed.

As the base currency (KuCoin) flat t KCS cash, knife elder brother think the root cause of the 313 crash or currency infrastructure is not perfect cause, COINS ring as "7 * 24" uninterrupted trading market, this is huge risk, plus two derivatives have proliferated, and active investors has barely increased, with risk under the blessing, the waterfall is inevitable in the market. It's fair to say that we're still building on the same foundation we put up in 2015, and building higher and higher, because everyone is too eager for BTC to break new records, but no one has considered that if the industry's infrastructure doesn't complete the iteration, "the higher building [BTC's price] will never come" than in 2017.

Eleven years after the birth of Bitcoin, the earliest international trading platform Bitcoin Market and Mt.Gox appeared, and people began to be able to trade BTC on professional platforms. In the early stage of China's cryptographic industry, three major platforms, namely bitcoin China, OKCoin and Huobi, also appeared. With the changes of time and market, today's coinan, OKEx and Huobi have three new platforms. In terms of the change of tradable products, cryptographic contracts and futures products are launched, and BTC futures and options products are launched by CME, Bakkt and other compliance platforms. It seems that the ecology is rich, but only the platform and derivatives are not enough.

BTC prices were volatile, especially after the "312 crash," and some platforms began to try to introduce new clearing mechanisms as part of the overall encryption industry infrastructure.

1, if there is a circuit breaker mechanism, 312 May not be so bad

In dao's opinion, the trading platform is essentially to serve investors and promote the development of the digital currency industry. However, with the disorderly development of financial derivatives, the entire industry has become the target of the trading platform.

As bitcoin fell from $8,000 to $3,700, the mining and futures markets suffered a "death spiral" of losses.

Taking the mining industry as an example, the basic logic is as follows: stimulated by the expected production cut at the beginning of 2020, miners have a "reluctance to sell" mentality, so they will generally choose to mortgage the mined bitcoin to pay the electricity fee, hoping to redeem the bitcoin after the price rises in the future.

But no one expected the unprecedented collapse that preceded the production cuts, which left miners with margin calls for collateral while the value of the money they dug up fell and the miners were forced to deleverage.

The futures market was hit even harder, with nearly $4.5 million being taken out of the market around 313. Many futures investors received short messages of being out of the market before they even had time to replenish their margin during the sharp fall, and some trading platforms even experienced severe outages, which was nothing short of adding fuel to the fire.

& have spent

Mr Dao even thinks that if BitMEX had not suffered two outages on March 13th (and there are rumours that it had been unplugged), forcing BTC's price to settle around $4,000, BTC's price would probably have been lower, perhaps $1,000.

Regarding the two outages of BitMEX trading platform on March 13, which coincided with the rebound of bitcoin, dao brother suspected that BitMEX trading platform maliciously manipulated the market; Of course, it is also possible that bookmakers can manipulate the market by attacking the futures trading platform. In short, the manipulation and lack of regulation of the digital money market is obvious.

Now, despite the outbreak, bitcoin is back at its late-2019 level, down less than 20% at current prices. It has done well against the backdrop of a general decline in global assets, but it has been a rollercoaster ride that has seen investors run out of money and faith and has severely affected all sectors.

If the coinage had a circuit breaker, the stampede might not have happened. The so-called circuit breaker is simply understood in the extreme market, trading platform automatically terminate trading for a period of time, in order to control the extreme market. Kwon is one of the earliest trading platforms to introduce circuit breakers, a feature called "price protection circuit breakers". This strategy means that when the user places an order, the system will judge whether the user places an order within the 10% restricted price range. If the order cannot be completed, only the order within the restricted price range can be completed.

Simple understanding, that is, when the user next super large order, if the currency price will be 10% of the impact, the system can automatically adjust the amount of the order, to avoid large order will break the disk.

Imagine that if the system had been adopted by trading platforms around the world, the currency might not have fallen off a cliff that day. Therefore, brother dao believes that the existence of the "circuit breaker mechanism" is still very significant, especially after the fall of 3.13, more identified with this point.

In addition, trading platform downtime at critical moments can have a considerable impact on investors. For example, when the currency price of a trading platform dropped sharply on March 13, there was an outage, which led to the failure of investors to liquidate their positions in time, leading to the tragedy of a large area of exploding positions. Although some trading platforms made compensation to users, they offered little help.

In this regard, library currency adopts dynamic capacity expansion mechanism and independently developed monitoring operation and maintenance system. When the big market comes, the access delay will often increase, library currency will realize dynamic server capacity expansion, 24h on duty operation and maintenance staff will respond in the first time to prevent downtime.

As a senior user of KuCoin, I often see the community similar to "KuCoin technology niubi", "KuCoin has never had an outage! In this case, this is why I bought a lot of KCS. The push of kcoin in the industry technology is obvious.

With the continuous development of the industry, money laundering and hacking are attracting more and more attention, and kuqian is also trying to launch a response mechanism.

2. Trading platform security and bottom limit

Digital currencies, represented by BTC, have long been known as "black money" in the outside world, because their anonymity and increasing liquidity have led to their use in dark web transactions, online extortion, black money transfers and even human trafficking, casting a shadow over the entire industry. But this is not actually a digital currency problem, digital currency is just a tool, traditional assets are faced with such a problem, extortion people tube you want renminbi is the renminbi problem?

But the problem is that institutions that manage traditional assets, such as Banks and financial companies, are highly compliant with local laws, which is still difficult to achieve in the blockchain industry.

Of course, the use of digital money in these areas also runs counter to Mr Nakamoto's original goal of creating bitcoin - to fight hyperinflation. And on bitcointalk, Mr Nakamoto had explicitly opposed putting BTC at risk. Mr. Nakamoto, for example, even stepped out of the spotlight after speaking out against the use of bitcoin as a donation to wikileaks founder Julian assange.

But in recent years, some in the industry have used the criminal use of bitcoin as a symbol of liberalism, and the trend is growing.

In my opinion, this is not a symbol at all, but a symbol of shame.

Take the recent incident of room N in South Korea as an example. As many participants transferred and paid by digital currency, kwon and kwon and Huobi were the earliest trading platforms to assist the investigation of south Korean police, such behavior could be regarded as having a sense of social responsibility. Kuyuan trading platform has been actively cooperating with governments to track down black money, which is one of the reasons that brother dao has been using kuyuan.

For another example, digital currency is often used to launder money, which may be used by drug dealers, hackers and other underground industries. As a result, governments around the world adopt strict supervision over digital currency. To better prevent money laundering risks, kuqian has established a special prevention and control system to identify external fraud, identity fraud, cash out, money laundering and so on.

For the digital currency trading platform, the biggest threat is hackers, once a vulnerability is used by hackers, all security measures in the system are likely to be breached by hackers, encrypted assets, user information are likely to be stolen. In the event of such an incident, the trading platform could suffer from either reputational damage or immediate failure.

For this reason, kuqian has started to develop a bank-level client-side security detection system to prevent hackers from monitoring users' passwords through trojans or changing the wallet address copied by users. Other security guarantees are various. This is different from other trading platform "users due to the Trojan lost currency, the consequences of their own" embarrassing scene.

At the same time, it recently announced a partnership with OnChain, a singapore-based digital asset hosting platform, which will provide custody of its assets and underwrite its funds with nordnord insurance, the world's largest privately held insurance broker. In the knife elder brother's view, this is equivalent to the security of coinage to add an insurance.

3. Speed and transparency are the key to the trading platform

In the early years of Mr. Nakamoto's invention, bitcoin was a geek's toy, and an idealistic geek even bought two Papa John's pizza coupons for 10,000 bitcoins, creating the world's most expensive pizza. At this stage, bitcoin circulated in the market in a small amount at a very low price, and the transactions were mainly OTC (OTC) transactions. There was no hype in the whole industry. This stage can be said to be the purest era in the currency circle.

However, with the rise of trading platforms since 2010, the industry has been plagued by scandals of fraud, hacking, contract gambling, pin sticking, rights protection and the disappearance of trading records. Gradually, people even became numb to these negative aspects, thinking that the currency circle should be so messy, so LOW, the trading platform should be fixed to explode.

According to dao, excessive pursuit of interests will destroy the reputation of the industry. The big trading platform has made money, but the notoriety has been left to blockchain and bitcoin.

For the trading platform, at least to make every transaction is open and transparent bar, put an end to brush volume and market manipulation is the bottom line.

Never underestimate the brush, I will analyze the disadvantage of the brush. At present, the transaction volume of digital currency can be said to be reckless. As a result, the Old Money of many institutional investors "forces" the regular army such as Coinbase and Bakkt, and the pie of all trading platforms cannot grow any bigger.

At the same time trading platform trading data timely transparent is also very important. In the process of constantly trying new trading platform, brother dao found that the Level 3 Level trading system created by kuqian can be open and transparent.

You may not have a concept of Level 3 data push, so to speak, the industry to achieve Level 3 Level is only Coinbase and library currency two. The technology can push price, quantity and order ID at the same time. At present, other trading platforms in the industry are at Level 2, which can only push the price and quantity.

Don't underestimate this little difference. When it comes to trading, it can make a big difference. For example, in a transaction, using a Level 2 trading platform, due to the slow response time, the trading platform is likely to start the transaction before the data is transmitted to the client, so as to give priority to the transaction. However, when transferring data with Level 3, all data is transferred in real time, and no one can touch it.

All in all, if the trading platform USES Level 3 data push, it means faster, more accurate and more transparent.

The development of any market is bound to follow such a rule, the financial market is no exception, that is, when the market develops to a certain stage, there will be a large number of professional traders will enter, they bring a large amount of capital, but also provide sufficient liquidity for the market.

Circle but currency trading platform for the development of seem misplaced, should have the basis of spot transactions such service will do a good job, and then began to develop derivatives trading, but the currency circle of the development of the pace is so big, before spot transactions there is not enough mature, digital currency derivatives have proliferated, 150 times the lever can be seen everywhere.

It's like trying to put a maybach V12 engine on a Charley and then having to push the gas pedal to the bottom, only to have the car destroyed, as the march crash showed.

So what are the criteria for choosing a good trading platform? Brother knife think can do the following is relatively good.

First, the code must be developed originally, which is the security limit. Because some non-standard small trading platform on tens of thousands of pieces of the whole set of code to live, these bought code is often full of holes, hackers are often easy to break. Taking the proportion of trading platform technology developers as an example, according to the understanding of dao ge, Huobi, kuobi and other trading platform technology developers are generally more than 30%.

Second, trading experience to follow up, fast is the hard truth. Taking the response time of the trading platform as an example, the response time of the current header trading platform is generally 100 milliseconds, which can only be said to be sufficient. Knife elder brother had been using library dollar benefited from the research of the lightning system, do the market has been compared, the library currency system are cancelled, settlement and its time is 20, 25 and 50 milliseconds respectively, is almost less than half of the industry average, faster speed not only improve users, especially the API user's experience, also that can raise capital utilization rate of 2-3 times.

Finally, the depth of the trade should be good, so that no pins are inserted. To do this, in fact, to observe the spread than trading volume more reference. For example, in the BTC/USDT transaction, the bid-buy/bid-sell/bid-sell spread is basically 0.1usdt. Brother dao told us that if the bid-buy spread of a trading platform is more than 1usdt, the liquidity is not very reliable.

& have spent

After 3.13 industry collapse, on the ruins, played a slasher "infrastructure" base currency, the role of promoting industry infrastructure work in silence, the industry will continue to develop, need more like library currency practitioners together to establish a new chain circle COINS ring order, let say goodbye to fraud and crime, digital currency industry to the mainstream of the world.

Welcome to join the official BlockBeats community:

Telegram Subscription Group: https://t.me/theblockbeats

Telegram Discussion Group: https://t.me/BlockBeats_App

Official Twitter Account: https://twitter.com/BlockBeatsAsia