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A detailed history of blockchain: From the Establishment to Broad Adoption

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A detailed history of blockchain From the Establishment to Broad Adoption

Blockchain has gotten an ample amount of appreciation in the most recent couple of years, with the potential to come across as an extraordinary power to transform businesses. Blockchain technology is a computerized record of an action that is copied and conveyed across the whole organization of the blockchain platform through computer networks. Sounds confusing, isn’t it? Truth to be told, Blockchain is much easier to understand than the above description.

For understanding the concept, it is feasible to look back at its historical background and learn about its origin to significant turns of events and innovations. Bits of knowledge into the background of Blockchain will assist us with addressing these queries like the exact meaning of the term,  working environment, problems it can solve, and where it can be implemented. All these insights will help us to place the right expectations for its future.

Table of content

  • What exactly is Blockchain?
  • When did the Blockchain first appear?
  • Who is behind blockchain technology?
  • How is Blockchain created?
  • Identifying a suitable Use-case
  • Selection of Suitable Consensus protocol
  • selection of a suitable platform
  • Node designing
  • Designing the Blockchain parameter configuration
  • APIs
  • Building admin and user Interfaces
  • Adding smart technology
  • Closing Thoughts.

What exactly is Blockchain?

A blockchain is a disseminated network that comprises computer systems associated with the Internet, which all together keep the account of transactions. In the Blockchain, one record is dispersed and protected across the system. Each computer in the group approves the exchanges. However, nobody has power over the network, not like various clients functioning in a centralized network. 

A blockchain incorporates a sequence of blocks, which are information units used to store value-based data of the organization. To add a block into a blockchain, these steps ought to occur:

  • When an exchange is performed, then it should be confirmed by a group of computer networks. The exchange should be compiled in a block; after getting approval from the network group. The digital signature of the sender and the receiver and the dollar’s value has to be stored in a block. 
  • A block should be given a hash to separate it from different blocks. This block additionally contains data of the hash of the newest added block into a blockchain. When hashed, this block can be put into the Blockchain.
  • After the inclusion of a new block in the Blockchain, the complete information of this exchange will be public, and any user in the network can explore this exchange data, for example, who sent it? Who received it? Who added this exchange to the block? When did the exchange occur? And so on. The information is apparent and auditable yet not editable.

A block is only digital data. A “chain” is characterized as a common information base. In this way, when we say Blockchain – we intend to discuss the digital data which is kept in a public data set.

When did Blockchain first appear? 

The very first appearance of Blockchain was seen in 2008. It was introduced by an individual named ‘Satoshi Nakamoto.’ Nakamoto improved the blockchain structure effectively, utilizing a Hashcash-like strategy to keep records of time and date of added blocks without expecting them to be endorsed by a central party and embedding boundaries to balance out the rate at which blocks were to be added to the chain. Next year, this blockchain structure was recognized as a central part of the cryptocurrency bitcoin, where it acts as the public record for all exchanges carried on the network. 

In August of 2014, the size of stored records of all exchanges that have happened on the bitcoin blockchain network filled up to 20 GB. In January 2015, the size had reached nearly 30 GB. This size expanded from 50 GB to 100 GB between January 2016 to 2017. While reaching halfway to 2020, this record size exceeded 200 GiB.

Who is behind Blockchain technology?

It is essential to learn about the historical background of Blockchain for Blockchain supporters and Blockchain prospects. Thus, to help readers to comprehend the Blockchain advancement, let us learn the  history of this technology:

1991-2008: Creation Period of  Blockchain Technology

Blockchain emerged in 1991  when W. Scott Stornetta and Stuart Haber deliberated what the world has come to know as a “Blockchain.” Their early work included shaping a cryptographically secured blockchain where nobody could alter timestamps of records. 

In 1992, they updated their technique to consolidate Merkle trees that improved proficiency hence providing the assortment of more reports on a solitary block. Nonetheless, in 2008, the term “Blockchain” began to acquire importance when Satoshi Nakamoto ingrained his idea of Blockchain in the blockchain space. 

Satoshi Nakamoto is credited as the master of blockchain innovation. There is not much knowledge about Nakamoto as individuals speculate he could be a single person or a group that molded Bitcoin, the primary application of digital roster technology.

How is a Blockchain created?

Here are steps that are needed to create a blockchain:

Step 1: Identifying a suitable Use-case

There are three use-cases where blockchains do very well:

  • Data Authentication and Verification: It focuses on encryption, inflexible storage and digital signatures, creation of private and public keys, and verifying digital signatures.  
  • Smart Asset Management: This focuses on disbursement, revenue, trade, bond, and retirement. In crypto, real-world properties are represented in the form of a token, for example, land, infrastructure, gold, silver, oil.
  • Smart Contracts: This focuses on trade between dealer and buyer with smart contracts.

Step 2: Selection of Suitable Consensus Protocol

Depending on your requirements, you need to choose the right consensus protocol among:

  • Deposit based consensus
  • Proof of stake
  • Delegated Proof of Stake.
  • Derived PBFT
  • Byzantine fault-tolerant
  •  Federated Byzantine Agreement
  • Redundant Byzantine Fault Tolerance
  • Federated consensus
  • Proof of Elapsed Time
  • Simplified Byzantine Fault Tolerance
  •  Round Robin

Step 3: Selection of a Blockchain Platform

This depends on your choice of consensus protocol. Many of them are cost-free and open source. Here are some examples:

Ethereum, Hyperledger Fabric, Quorum,
HydraChain, Stellar, Hyperledger Iroha,
Open chain, Hyperledger Sawtooth Lake, and many more.

Step 4: Node designing

Blockchain systems can be designed as private/public,  permission-less as well as with permission, or even hybrid. 

Another important factor to be considered at this step is whether the nodes are running on-premise or in the cloud. Also, the selection of operating systems and tasks related to hardware configuration such as processors, and memory and disk size is to be done in this step. 

Step 5: Designing the Blockchain Parameter Configuration

Usually, blockchain platforms require a thoroughly plotted configuration for elements like permissions, atomic trades, key management, asset issuance, multiple signatures, address formats, hand-shaking, etc.

Step 6: APIs

Most platforms offer pre-built APIs, while others don’t. The issues that you’ll need APIs for are: 

  • For developing keys and addresses.
  • Conducting auditable processes.
  • Performing data verification by using hash and digital signatures.
  • For holding data and its recovery.
  • Managing smart-asset, I.e., distribution, bond, donations, business, etc.
  • Creating smart contracts.

Step 7: Building admin and user Interfaces

At this step, you’ll select the programming languages. You’ll also have to pick external databases and servers.

Step 8: Adding smart technology 

Boost the potential of your Blockchain solution with the addition of Artificial Intelligence (AI), cloud, data analytics, biometrics, machine learning, and bots.

Closing Thoughts

The Blockchain provides amazing advancements in security, decentralization, transparency, and unchangeable data. These qualities make it a perfect tool for future applications. 

It has marked its territory in many industries, and many more yet have to embed it.

Learn more about blockchain technology and take up a suitable blockchain course at Blockchain Council.

A detailed history of blockchain: From the Establishment to Broad Adoption

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Trading Bots vs Humans: Everything about trading accuracy

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Trading Bots vs Humans Everything about trading accuracy

Over the past decade, we’ve seen the rise of trading bots and Quantitative Funds, and we have also seen the fall of traditional asset managers and Hedge funds. Due to these uncertainties in the market of cryptocurrency trading, trading bots are gaining much popularity. Unlike humans, crypto bots never rest and hence maintain their control over the trading all the time. However, according to certified cryptocurrency expert, it is very complicated to declare one of them as the best assistant than the other as needs and requirements  vary. There are some factors we are going to explore regarding bots Vs. Humans in the field of trading accuracy.

Table of Content

  • Different sections for evaluating trading accuracy.
    • Trading bots for retail.
    • Proprietary trading bots
    • Professional (Human) Investors
    • Retail (Human) Investors
  • Advantages of trading bots
    • Potential for greater performance
    • Automation
    • Emotionless
    • Scale
    • Speed and Longevity
    • Consistency
    • Strategy Diversity and In-built backtesting
  • Advantages of Human traders
    • Less vulnerable to fake news 
    • Subjective analysis of data
    • Black swan events
    • Big free
  • Closing thoughts

When we think of trading bots vs humans, the trading accuracy can be evaluated using different settings to carry out a fair comparison. Hence, some sections that we can look through are mentioned below.

Different sections for evaluating trading accuracy:

  • Trading bots for retail

These bots are accessible through all the known bot platforms that you can find with a quick Google search.

  • Proprietary trading bots

These are developed in-house by established Hedge Funds, jotted down by extremely smart finance statisticians and professionals.

  • Professional Investors (Human)

The regular fund managers that you will find on the finance channels lauding their positions.

  • Retail Investors (Human)

These are everyone else. In the  Australia and U.K, they can be seen on the CFD trading platforms.

Now, let’s look into what Bots can do for crypto trading and how they are better than humans.

Advantages of trading bots

  • Potential for greater performance

The best performing trading bots have shown a performance that is considerably better than the best performing humans. 

  • Automation 

Crypto bots can automatically conduct trades when a certain level has been attained at any moment of the day. They work with logic and predictability in statistics and probability theory; this strategy produces more favourable outcomes over time.

  • Emotionless

Bots can analyze information without any little emotion. They recognize the importance of a wide range of events and will not get attached to their positions.

Bots are proficient in processing considerably more data and in much lesser time-frames. This means they will not skip a valuable announcement on a portfolio company. Also, they can look through more companies and thus fix the risk efficiently.

  • Speed and Longevity 

Speed lessens slippage as response time is not required and also offers arbitrage opportunities. Bots can run 24/7, which is helpful for cryptocurrencies. In contrast, Humans need to sleep, eat, and live. A human generally can work up to 40 hours a week, but a bot works 168 hours a week; thus, it can seize 4.2 times more opportunities.

  • Consistency

Bots are designed to be consistent when they engage in a portion of data or an announcement they will respond repeatedly in the same manner.

  • Strategy Diversity and In-built backtesting

As bots are capable of scaling and running at pace, they can work on various time-frames and with varied techniques that are not correlated, which decreases the risk. This is due to low P&L volatility.

Every strategy followed by bots can be backtested numerous times and in many settings automatically. This ensures that the particular strategy is working and if you should hold onto it or not. This also assists you in managing risks better.

let us see what Human traders can provide for trading accuracy over bots:

Advantages of Human traders

  • Less vulnerable to fake news

Sometimes, tweet manipulations can send bots into a mad chase after a specific coin or stock to then be left moving in circles when they find out the news article was not genuine. However, humans are capable of looking into the matter from a reasonable perspective.

  • Subjective analysis of data

In some cases, a particular piece of data won’t show the first-degree-thinking conclusion and will require in-depth research to understand the importance. Bots can look at words and overall sensitivity in many cases, but then there can be news events that they cannot respond to.

  • Black swan events

Humans can think rationally regarding a situation. When black swan events occur, bots tend to lose millions because it is one of those scenarios they yet have not encountered. Human traders are much better at responding to severe mispricings and even seize advantage from them.

Bots are vulnerable to errors and bugs. There have been times when crypto bots have effectively made a mistake with trade and ended up inflicting a massive money movement. Bots can also crash trades by leaving them offline for a long duration of time.

Closing thoughts

You need to understand the overall market before going forward with any decision. Factors like ease of use, price, reliability, and security are few things that you must consider before choosing trading assistance. As many trading bots can give you relief, they also can be proved ineffective if you are not knowledgeable about the generation of financial strategies. 

To learn more about cryptocurrency trading  and attain various courses and certifications, check out the Blockchain Council.

Trading Bots vs Humans: Everything about trading accuracy

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Market enters a ‘wait-and-see phase’ as Bitcoin struggles below $40,000

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Price action for Bitcoin (BTC) and the wider cryptocurrency market was relatively subdued on May 27 as nervous traders remain unsure of what comes next following last week’s market plunge that saw leveraged traders wiped out as BTC dipped as low as $30,000 before its price rebounded. 

Data from Cointelegraph Markets Pro and TradingView shows that while Bitcoin’s price has managed to put in higher highs and higher lows over the past week, bulls continue to face stiff resistance at any meaningful attempt to break above $40,000 as bears defend the psychologically important level.

BTC/USDT 4-hour chart. Source: TradingView

For many traders, the recent correction likely triggered PTSD-like flashbacks of the market crash of 2017 and 2018 and the ensuing two-year crypto winter, and this could be a reason why the market seems indecisive at the moment.

Given that many traders are unsure of what might come next for Bitcoin’s price, it’s wise to consider the various bullish and bearish scenarios that could play out and to also take stock of the opinions of analysts in the sector.

Traders remain cautious after the recent sell-off

According to David Lifchitz, managing partner and chief investment officer at ExoAlpha, it’s important to look closely at the recent market events and review the catalysts that created the current situation.

Lifchitz told Cointelegraph that following an “almost uninterrupted bull run from $10,000 in October 2020 to an all-time high for BTC at $65,000 in mid-April 2021,” the market saw several waves of profit-taking ahead of the “great deleveraging of 2021,” which saw the price of BTC fall by 54% to $30,000, while Ether (ETH) and altcoins were hit even harder.

According to Lifchitz, the correction succeeded in “drastically reducing the amount of leverage that prevailed in the ecosystem,” which can be seen as a healthy development for the overall market, as it will help “to build on a more stable base.”

Estimated leverage ratio for Bitcoin. Source: CryptoQuant

Lifchitz cautioned that while data shows that some early dip-buyers managed to pick up tokens near the lows, both volumes and futures open interest have remained weak, “showing no urgency to reload.”

The monthly options expiration for Bitcoin and Ether are less than 24 hours away, and Lifchitz believes they are standing in the way of “any meaningful move in the very short term.” He also suggested that it will be “difficult to convince burned investors to get back in the game just now” due to a lack of upside catalyst and the recent reminder that “prices do not always go up.”

This has put the market in a “wait-and-see phase,” according to Lifchitz, with both trend followers and contrarian investors needing “to see some motion, either up or down” before they engage in the market.

Lifchitz said:

“The market definitely needs a catalyst, either upward or downward to move ahead. A too long period without any catalyst could lead to investors fatigue who might decide to cash out and seek other pastures, which would act as gravity on cryptos triggering a downward move. The next few days/weeks will be very telling of what to expect next.”

Bullish indicators abound

While the average crypto trader is currently in a state of stasis and awaiting the next major market move to signal what BTC might do next, on-chain data indicates bullish moves from larger players who took full advantage of the recent dip by buying.

According to Micah Spruill, managing partner and chief investment officer at S2F Capital, most of the selling that was seen at the recent lows “has been from newer entrants to the market” who have “been selling at a loss and seem to be exhausted at this point.”

In a conversation with Cointelegraph, Spruill pointed to BTC net transfer volume, which shows that following the bearish downturn between May 17 and 20, “Massive amounts of USDC and USDT have been sent to exchanges (to buy BTC, ETH, etc.) and pull them off to long term storage.”

BTC net transfer volume to/from all exchanges. Source: Glassnode

Further analysis shows that retail wallets holding between 0.1 and 1 BTC, as well as whale wallets holding between 1,000 and 10,000 BTC, have been accumulating at these levels in preparation for an overall move higher.

Another bullish indicator mentioned by Spruill is entities’ net growth, which “is recovering back to prior levels” and may signal that “the bull market is back in full force” if this trend continues over the next few weeks and the metric resumes its highs.

Entities net growth for Bitcoin. Source: Glassnode

Overall, Spruill sees a positive move for BTC in the future, although the timing is questionable due to a variety of factors.

Spruill said:

“I think there’s a possibility we could spend an extended period of time (months) between the $30,000 to $42,000 level as the market digests recent events and we endure a mid-cycle re-accumulation period. Alternatively, it’s possible we have a COVID-like recovery whereby we see Bitcoin break outside this range soon and recover much faster than others are expecting.”

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk, and you should conduct your own research when making a decision.

Market enters a \’wait-and-see phase\’ as Bitcoin struggles below $40,000

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Is Blockchain a Good Career? How to Get Started?

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Is Blockchain a Good Career? How to Get Started?

Are you confused and wondering how to get started as a Blockchain Professional? Well, this article has got you covered. 

Table of Contents 

  • What Exactly is Blockchain? Why is it Gaining Momentum?
  • Tips to Start Blockchain Career
  • Top Highest Paying Blockchain Jobs 
  • Concluding Lines 

What Exactly is Blockchain? Why is it Gaining Momentum?

Blockchain can be defined as a decentralized distributed trustworthy digital ledger that keeps track of transactional records in an immutable manner. Blockchain’s significant highlights are that technology provides complete transparency, reliability, immutability, security, and privacy. 

There is a lot of hype around Blockchain technology, and this is because of its actual potential. Technology has started impacting multiple applications such as financial and technical sectors by utilizing smart contracts and other revolutionary applications. Claims have been made about its ability to provide aid in the supply chain, healthcare, music and entertainment, logistics, and others. Its peculiar features make Blockchain appropriate for every industry, and it seems like it is going to be a relevant subject of conversation for many upcoming years. 

Tips to Start Blockchain Career

The increasing popularity of Blockchain for various practical use cases has resulted in a rising demand for Blockchain jobs. Here is an outline of the best tips for starting a career in the blockchain space.

  • Learn Blockchain Fundamentals

In order to start your career in this domain, it is essential to understand and learn what its fundamentals are. Blockchain fundamentals include understanding how the technology works, its benefits and use-cases, what are smart contracts, concepts of networking, cryptography, consensus mechanisms, decentralized applications(dApps), etc. These 

fundamentals not only improve the basic knowledge but helps in building the foundation for understanding its practical uses.

  • Understand Data Structures and Develop Programming Knowledge

Due to Blockchain’s complex structure, it is essential to learn data structures. Also, programming expertise is mandatory in order to become a Blockchain Developer. You can learn any programming languages such as Java, Solidity, C++, Python, JavaScript, Ruby, C#, etc. but remember that you need fluency in at least one of these. 

  • Focus on learning Blockchain Security

Blockchain learning is incomplete without learning about its security. Therefore, it is important to learn Merkle Tree, cryptographic hashing, private key, and public-key cryptography, etc. Learn about Blockchain’s inherent security features and associated risk, and understand the best security practices for Blockchain infrastructure. In order to become a Blockchain developer, one must know how to mitigate Blockchain security risk.

  • Augment Profile with Hands-on Experience

 If you are a beginner, learn Blockchain fundamentals and get involved in an internship or an entry-level position in a startup to identify your interest areas while learning on the job.

  • Attend Webinars

If you are thinking of a career in the Blockchain space, attending free and paid webinars can prove to be really beneficial. Such webinars can provide an introduction to the world of Blockchain, explains functional and business knowledge related to Blockchain, and most importantly, keeps you up-to-date regarding the latest versions and announcements taking place. 

  • Participate in Events and Conferences

The interest in Blockchain space is booming and showing no sign of slowing down. If you want to get started in this domain, it is important to find your way around the industry dynamics. Thus, attending events and conferences can help you develop your industry knowledge as senior industry leaders, and Blockchain enthusiasts all around the globe gather at events and conferences.

  • Join Professional Courses 

If you are a beginner in Blockchain but passionate about learning, then, in that case, the Blockchain Certification course is a perfect choice for you. Such courses provide a complete understanding of technology and offer valuable tips that ensure you have an in-depth understanding of Blockchain and its implementation. Also, certified candidates gain the ability to solve real use case scenarios in blockchain applications. 

Top Highest Paying Blockchain Jobs 

As the domain of Blockchain is exploding, it is creating lots and lots of career opportunities for technocrats. Technological advancements are increasingly bringing this decentralized distributed ledger technology to the mainstream. Let’s enlist some of the leading job roles in the Blockchain space. 

  • Blockchain Project Manager
  • Blockchain Developer 
  • Smart Contract Developer  
  • Blockchain Architect 
  • Blockchain Software Engineers 

According to Glassdoor, the national average salary for a Blockchain Developer is $1,01,689 in the United States, and the national average salary of a developer is ₹5,07,137 in India.

Concluding Lines

Blockchain, without a doubt, is a good career, offering tremendous job opportunities to beginners and professionals.

Now comes the question, from where to grab all fundamental, technical and practical knowledge to start a career in Blockchain quickly? Professional courses offered by Blockchain Council can help you develop the necessary skills and knowledge required for an exciting future. 

Hope the tips mentioned above will definitely help you in starting your career in the Blockchain space. 

To get instant updates about Blockchain Technology and to learn more about online Blockchain Certifications, check out Blockchain Council.  

Is Blockchain a Good Career? How to Get Started?

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5 Ways to Learn About Cryptocurrency

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5 Ways to Learn About Cryptocurrency

There has been a very noticeable shift in the public conversation surrounding cryptocurrencies over the last year. We have seen a marked increase in the amount of institutional interest in the biggest coins, the explosion of Dogecoin, as well as sizable investments from publicly traded companies and other high-profile investors. What’s more, there is a wealth of knowledge online that is free and easily accessible that newcomers can use to better acquaint themselves with crypto. 

An increasing number of businesses are accepting cryptocurrencies as payment for goods and services and the technology used to mine and store coins have improved dramatically. Cryptocurrencies are being touted as the next major store of value in an unpredictable global economy. Naturally, retail investors who may have once ignored this asset class or been entirely unaware of it are starting to take an interest. If you are new to cryptocurrencies, below are 5 ways to learn about them. 

Take a Trading Course

For many people, learning is best done hands-on, and there is really no better way to get this kind of experience than by taking one of the many highly informative crypto trading courses out there. These courses have been springing up a lot in the last couple of years and they are usually a good place to start if you have the money and time to invest and would like to see how trading is done from start to finish, as well as a breakdown of the technology and major currencies themselves. 

You get hours of on-demand video accompanied by live examples of real investing that you can then take and apply to your own crypto strategies. There are beginner and advanced courses, so you can continue the learning for as long as you like and at as high a level as you feel comfortable. 

Read Industry Publications

Formal education is important, but staying up-to-date on industry and market news is crucial for investors, regardless of the asset class. If you want to know what the market is doing, what experts think about particular coins, exchanges and wallets, and where and why you should invest your money, then putting together a daily reading list of journals, magazines and periodicals is essential.

You can simply bookmark the publications you would like to read, but a better way to manage and curate your information diet is using a content aggregator like Feedly, which lets you pick and choose your reading material, segment it by category and then gives you a steady stream of all the new headlines published by these outlets as they become available. 

Use a Mock Trader

Demo trading sites and crypto simulators abound and they are all designed to give you real-time experience buying and selling digital assets without any of the risks. The best way to use these training tools is to spend some time researching the coins you are most interested in trading and then purchasing them using your mock account and trying to understand how and why the prices are fluctuating based on the information you have available to you. Learn why certain coins might go up and others down until you feel confident that you are able to read the market well enough to start putting real money into it on real exchanges. 

Browse Forums 

Every intermediate or advanced investor in any asset class, at one point, started as a beginner. They had to learn the ropes, understand the language, and experience investing first-hand before they eventually evolved into competent, confident investors.

One of the biggest advantages when you are a beginner, in any field, is to be surrounded by people more experienced than yourself, and ideally those who are willing to share their knowledge and experience with you. Even if they are not, however, there is still a lot to be gained just by observing knowledgeable and seasoned investors interact and weigh-in on different crypto-related topics and current events. 

Places like crypto subreddits on Reddit.com, or the comment sections of popular podcasts and news outlets are good places to browse, both when you are first starting out and as you begin to learn the ropes. Here are where people who actively invest come to give their two cents on major market goings-on, argue with one another about investments, opportunities and threats, and trade tips and tricks. Absorbing all of this as a new investor can be overwhelming, but watching experienced investors interact is one of the most helpful things you can do as a newcomer. 

Read the White Papers

If you have a math or programming background, and even if you don’t and are willing to teach yourself the basics, it is always worthwhile to start your research into a coin by reading its white paper. Any large investor in cryptocurrency, institutional or otherwise, has read a given coin’s white paper before deciding to invest, as the white paper is essentially the proof of concept for a cryptocurrency.

It lays out how the coin operates, what unmet market need it serves, or which need it serves better than the competition, as well as a list of other important factors including the supply of the coin and how it is mined and validated. There are tips and tricks to getting the most out of a white paper. 

It is important to understand the fundamentals of a coin, and any asset for that matter, otherwise you are investing without really knowing the product. Sure, you might enjoy a bull market or time a major run on a coin and make money, but if you truly understand why something is and will continue to be useful and therefore its adoption and proliferation potential, you can make much more confident and hopefully accurate investment decisions. 

Conclusion 

Learning a new asset class takes time and dedication. This is something you have to chip away at day after day. Cryptocurrencies are highly complex assets, and the underlying technology can be difficult for many people to wrap their heads around. Perseverance is key. If you are new to cryptocurrencies and blockchain and are determined to turn yourself into a knowledgeable, experienced investor, keep the above ways to learn and improve in mind and make every day a quest to learn more about digital currencies.

5 Ways to Learn About Cryptocurrency

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Data shows the ‘Bitcoin price drops ahead of CME expiries’ claim is a myth

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Historically, activity surrounding the Bitcoin (BTC) monthly futures and options expiry has been blamed for weakening bullish momentum. A few studies from 2019 found a 2.3% average drop in BTC price 40 hours before the CME futures settlement date. 

However, as Cointelegraph reported in June 2020, the effect faded away. While 2020 seems to have rejected the potential negative impact of CME expiries, so far, the current year appears to validate the theory. Bitcoin’s price has been suppressed ahead of futures and options expiry in the first three months of 2021.

Bitcoin performance before and after CME expiry, USD. Source: TradingView

Some investors and traders have pointed out that Bitcoin’s incredible rally after the recent futures and options expiry dates has become a trend.

BTC has effectively rallied in the days following the expiry, but expanding this analysis uncovers a less-than-satisfactory trend.

Three consecutive events don’t prove a trend

The past 13 months have been nothing short of spectacular for Bitcoin, as the cryptocurrency posted 788% gains. August 2020 turned out to be the worst month, as BTC presented a 7.5% negative performance. Thus, choosing random starting points within the month will likely show a similar positive trend.

For example, if one uses the “last quarter” moon phase as a proxy, the odds that a rally takes place after each event are very high.

Bitcoin performance after “Last Quarter” moon, USD. Source: TradingView

As depicted above, indeed, Bitcoin rallied after five out of the last six instances. The only conclusion might be that positive trends are the norm rather than the exception during bull runs.

Although there might be some explanation to the reason behind Bitcoin’s end-of-the-month underperformance, these are only hypotheses.

While market makers and arbitrage desks could benefit from suppressing the price after a rally, other forces, including leverage futures longs and call option holders, would balance that out.

Bitcoin price did not drop in three of the last seven expiries

Therefore, it makes sense to analyze the potential price suppression ahead of the expiry instead of looking for explanations for a rally during a bull market.

Bitcoin performance before and after CME expiry in 2020, USD. Source: TradingView

Both October and December 2020 expiries failed to present any negative pressure ahead of such dates. Meanwhile, the 12% positive performance on the five days that preceded the most recent April 30 expiry also puts a big question mark on how meaningful the CME event really is.

Considering there hasn’t been a price decrease ahead of monthly futures and options expiries in three of the last seven instances, this evidence should put a nail in the coffin of the unfounded myth.

As mentioned earlier, trying to develop theories on why sellers acted more aggressively on specific dates is unlikely to yield results.

As shown above, Bitcoin’s price failed to underperform in three out of the last seven expiries. A 57% success rate should not define a trend when a positive performance after a specific date has been proven common during a bull run.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph. Every investment and trading move involves risk. You should conduct your own research when making a decision.

Data shows the ‘Bitcoin price drops ahead of CME expiries’ claim is a myth

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