Risk or return: how the digital currency exchange profit through the new currency


nnnWhen Bitcoin Cash goes out, many digital currency exchanges face tough choices. As the support of this token may need to spend some time and money, and for security reasons, many exchanges are still hesitant attitude. But the exchange to support the tokens is optimistic about its development trend, that can be profitable through its transactions. However, it is clear that, regardless of whether Bitcoin Cash is successful in the future, the exchange needs to support its transactions to solve a series of problems.n
nnTranslated by: Inan
nBeing a new member on a block chain is not always easy.n
nBitcoin Cash, a new digital currency just around a month ago, has received a lot of attention from users, miners and investors because they all want to know how the first big bifurcation of the original Bitcoin network will affect itself.n
nBut the most stressful is the consumer-oriented business, the exchange, because it is difficult to make a decision to take into account the hardware development time, cost, and regulatory burden needed to support any new digital currency that represents a unique block chain.n
nHowever, some people decided to do it very quickly. Kraken and Bitfinex, the two popular exchanges, immediately accepted Bitcoin Cash after the bets of Bitcoin.n
nAccording to Kraken founder Jesse Powell said:n
nn”Kraken is one of the few exchanges that initially announced support for Bitcoin Cash financing and trading, and many exchanges did not initially determine what support they would provide, and some even expressed no support at all. Now more and more transactions Called Bitcoin Cash, although some say it will take a few more months to support it.n
nnPowell’s comments criticized Coinbase, the largest US exchange. The exchange was initially strongly opposed to the shelves Bitcoin Cash. But because Bitcoin Cash maintained a good momentum of development, in many users complained or even after the lawsuit, Coinbase completely changed its position.n
nNow, the exchange says it is working to support the currency by January 1. According to a blog post on Aug. 3, Coinbase decided to support Bitcoin Cash, based on factors such as network security, customer needs, trading volume and regulatory considerations.n
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nChoose a campn
nThe varying degrees of acceptance and support for this new digital currency show a deeper disagreement over the bitcover community, especially on the future of Bitcoin (digital currency), and what can make the market stable and at the same time ensure its growth.n
n”People have their own views on the feasibility of different models,” said Marco Santori, a partner at Cooley Law Firm and financial technology practice.n
nHe pointed out that the debate and the question of whether the exchange would have a new digital currency and how many people really wanted to own it had made a clear disagreement over the appropriateness of Bitcoin Cash.n
nThe answer is very simple for Kraken, who is outside of the massive debate that began in early August.n
nPowell said: “We think Bitcoin Cash is likely to be successful and hope that our customers will benefit as much as possible, which means that they will be able to start the new tokens as soon as possible.”n
nIn addition, the exchange also believes that this is a way to increase their income.n
nPowell also said,n
nn”This bifurcation price fluctuation may be great, indicating that there is a great deal of trading opportunities.” In fact, a large number of new customers have poured into Kraken and the bits have been saved to us here before bifurcation, so they can get Bitcoin Cash, and if we trade, we will be profitable, so it ‘s a win for us and our customers.n
nnPowell said that although many Kraken users immediately sold all of Bitcoin Cash, but as long as the seller has buyers, and Bitcoin Cash prices did not stagnate, has recently risen to more than 700 US dollars.n
nPowell said, “there are some ‘strong opponents’ that Bitcoin Cash will eventually lose to conventional Bitcoin, but perhaps it is some of them to own Bitcoin are replaced by Bitcoin Cash.n
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nRisk or return?n
nWhile trading volume and earnings seem to be positive factors for the exchange, some of the things that Coinbase has considered to be treated with caution, as Coinbase mentions in his post.n
nAccording to Bitcoin ABC contributor Calin Calianu said the exchange did not know what had happened and they were nervous. Initially, the exchange was to be confirmed 10 to 20 times on the block chain until the deposit was cleared.n
nRecently, early exchanges such as Kraken and Bitfinex had reduced the confirmation requirement to 10 or less times. Powell said it was not surprising, because “the idea of ​​making market decisions” would make people quickly support the new tokens.n
nBut Calianu, who supports Bitcoin Cash’s mission, told CoinDesk:n
nn”Other exchanges are more cautious. This is not the safest currency, because there is a large miner presence, as long as he is willing to be able to launch a comprehensive attack on the network.n
nnHe also said that risk factors and returns can also reflect the characteristics of different sizes of exchanges.n
nn”Some exchanges support Bitcoin Cash to take a greater risk because they are smaller and want to attract business; and Coinbase is larger, it is not the risk it wants to bear.If it wants to make a decision, To see if the currency is worth its investment. “n
nnIn addition to the influence of some ideological factors, the reluctance of the exchange to accept the new digital currency may also be due to the lack of technical expertise to support them – requiring some software development. (That is, unless they are built on the ether square platform on the token).n
nPowell said that Kraken had to increase support for new currency pairs and support the deposit and withdrawal of new tokens.n
nHe explained:n
nn”At Kraken, we are fortunate to have the technical capabilities of the new asset pair soon, and this is by no means insignificant. The most time consuming part of this process may be to add a new financing gateway because we are very careful about this There are many customer safety features in our wallet system. “n
nnCalianu agrees with this, explaining that development costs can be quite expensive. He predicts that the cost of supporting Bitcoin Cash may be between $ 200,000 (the developer is very efficient) to $ 1.5 million.n
nHe said the exchange could not want to spend a sum of money and a few weeks after the development time, the new digital currency disappeared the next day.n
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nother problems n
nPowell points out that Kraken has to deal with other major issues in addition to the technological infrastructure transformation in the bit-bifurcation event, including: what trade pairs to offer; how long a new pair should be made after the bifurcation; Forks deal with margin trading; Kraken should begin depositing and withdrawing new tokens after bifurcation.n
nPowell admits, “At present, we do not have a whole set of strategies to deal with these problems, one after another in the bifurcation.”n

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