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What are social trading and copy trading?

There is a strong correlation between social trading and copy trading, though they are distinct in their own right and should not be mixed.

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Social trading can be described as those activities that engage or facilitate interactions among traders to strengthen the crypto community. On the other hand, copy trading is an element of social trading that allows users to mimic the trading patterns of other traders, in particular, experienced or professional traders.

As industry players and professionals in the cryptocurrency and blockchain space, it’s helpful to understand why these terms are different and how they are similar. Not only will we better understand these concepts but it also makes it easier when explaining them to those who might be new to the industry.

What are the advantages and disadvantages of copy trading?

There is no magic trick to understanding how copy trading works. Once traders make a successful trade, they have the option of sharing their trades with other users. If they choose to share, then copy traders can opt to copy them.

There are benefits for both sides in copy trading. Other than potentially gaining more trading profits from copying the practices of professional traders, copy traders acquire knowledge and new techniques that may be useful for them in the future.

Those who choose to share their trades receive a commission, usually in the form of a percentage or a fraction of the earnings each time their trade has been copied. Such incentives are encouraging and motivate professional traders to share their trades for other users to copy. In this respect, copy trading is a win-win situation.

This has helped the practice of copy trading to quickly become popular. As more new traders join in with copy trading, they gain more practice and become better traders. In turn, they’re more likely to share their own success with future copy traders to get the additional rewards of copy commission. However, there are some precautions to be observed. It is no secret that many who utilize the copy trading feature are predominantly amateurs. Due to their inexperience, they might make unfavorable copy trades that prove to be unprofitable in the long run.

One common mistake from new copy traders is that they’re swift to copy others, especially those with a large number of followers. It may not always be the case that traders with a large following are trustworthy.

Why is social trading so important for the industry?

According to Statista, the number of cryptocurrency users grew by 25% between Q2 2019 and Q2 2020, reaching an all-time high of 50 million. Therefore, it’s evident that more and more people are searching for new investment opportunities in the cryptocurrency industry, but a large portion of these investors are newcomers. Becoming involved in social trading activities is a perfect way for them to kick-start their crypto journey.

When traders share information about trading or events occurring in the industry, they will gain more insight into trading. They can even share ideas or ask questions about trading procedures to get input from those in the know.

However, the influx of newcomers puts responsibilities on crypto companies to ensure that they aren’t jeopardizing the ongoing growth of the cryptocurrency community. Operators offering social trading should scrutinize traders to ensure that they do not cheat others or engage in behaviors that create distrust within the industry.

Knowing they’re using a safe social platform will give investors and leaders more confidence and will help to boost the reputation of the cryptocurrency sector.

What’s hindering exchanges from becoming more innovative with social trading?

There is still quite a bit of work to be done regarding the innovation of copy trading and social trading. Only a few exchanges have integrated the copy trading feature. However, that could quickly change because exchanges can freely borrow innovative ideas from their competitors without any legal restrictions.

What the industry lacks and needs is a robust, comprehensive and intellectual property legal framework that prevents exchanges from stealing the work of other players. Emerging exchanges are particularly vulnerable to this threat.

While that is so, some may argue, on the contrary, that adopting shared ideas has been working for the industry so far, and any interference could create problems. The counterargument is that it takes dedication, commitment and a lot of hard work to create something innovative, so laws governing unfair competitive behaviors like this are essential. Having sound intellectual property laws may even encourage companies to be more creative, and, who knows, they might come up with unique social trading innovations that can bring the community closer.

Furthermore, investors would be more likely to back crypto exchanges that can prove themselves to be innovative. Once the crypto community practices and complies with similar industry standards as its traditional counterparts, it will gain more respect from the financial community, and exchanges can be creative without any fear.

This article does not contain investment advice or recommendations. Every investment and trading move involves risk, readers should conduct their own research when making a decision.

The views, thoughts and opinions expressed here are the author’s alone and do not necessarily reflect or represent the views and opinions of Cointelegraph.

Daly Young has led many projects throughout his career that allowed him to gain a wealth of experience and knowledge about the finance and technology sectors. Daly pursued and completed his bachelor’s degree in communication engineering at Shanghai Jiao Tong University — one of the top five prestigious universities in China. Right after, Young kick-started his career journey with Tencent, one of China’s top tech conglomerate giants, and was employed as the product manager for five years. He later moved on to Futu Securities International (Hong Kong) Limited, a fintech company ranked among Asia’s top online brokerages. Daly now works as the product lead for Bingbon.

Source: https://cointelegraph.com/news/what-are-social-trading-and-copy-trading

Blockchain

Elon Musk’s latest Dogecoin ‘trolling’ isn’t impressing the crypto community

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Tesla and SpaceX CEO Elon Musk argued on Twitter today that Dogecoin (DOGE) can beat Bitcoin (BTC) “hands down,” with just one small condition—almost every DOGE’s fundamental aspect needs to change, effectively turning it into a different token altogether.

So no big deal then.

“Ideally, Doge speeds up block time 10X, increases block size 10X & drops fee 100X. Then it wins hands down,” Musk replied to a Twitter user who was arguing that “Elon is choosing $DOGE because Dogecoin is better than Bitcoin in many fundamental ways.”

Judging by the community’s reaction, a lot of users were left feeling unsure whether Musk was “trolling” or not. One commenter pointed out that if Dogecoin’s blockchain would produce 10-megabyte blocks every six seconds, this will make the network vulnerable to spam attacks.

“For those bad at math. 100X higher transaction volume with 100X lower fees means total fees earned stay same. Low fees & high volume are needed to become currency of Earth,” Musk retorted.

When asked why he won’t just make a completely new cryptocurrency that can satisfy these technical requirements, Musk explained that it’s a “big pain in the neck to create another one.” Still, he implied that this is also a possibility, but “only if Doge can’t do it.”

In his turn, Adam Back, CEO of Bitcoin development firm Blockstream, questioned Musk’s blockchain expertise in general.

“That’s not how any of this works, Elon Musk. Would be like someone wading into SpaceX with ideas for a cuboid rocket fueled by water,” Back wrote, adding, “He’s just trolling. And probably hitting a blunt.”

Other users were less lenient, arguing that if “Donald Trump has been banned for ‘being bad’ for people,” there is no reason why Musk “should keep having this privilege.”

In general, many commenters pointed out that for a blockchain network to drastically increase its throughput and scalability, it needs to make compromises in other areas such as security and decentralization. 

“Have you tried making your spaceships 10x lighter, and 10x faster, and also 10x bigger? This would ideally save on energy and efficiency,” another user ironically asked Musk.

In the end, regardless of whether Musk was actually joking or not, his behavior on Twitter—especially when it comes to cryptocurrencies—has been a bit over the top lately, some commenters argued.

“Because [Musk] has millions of newcomer users who may not know the difference. Funny trolling to him = rekt newbs in real-life,” Back concluded.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://cryptoslate.com/elon-musks-latest-dogecoin-trolling-isnt-impressing-the-crypto-community/

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Blockchain

Bitcoin Hashrate of Major Chinese Mining Pools Drops Rapidly

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Bitcoin network’s hashrate recorded a rapid drop today across major Chinese mining pools including f2pool losing 11.26% a spool lost 16.23%, Binancepool recorded a decline of 14.38%, and Huobipool lost 23.68%. The rapid decline is being attributed to another power outage in Sichuan province. Industry insiders claimed the decline might be temporary and might bounce back soon.

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The decline in the mining pool’s hashrate comes days after the Bitcoin network’s mining hash power reached a new ATH. Bitcoin price on the other hand continued to consolidate under $50K. The top cryptocurrency saw a major sell-off a few days ago amid growing inflow on exchanges aided by Elon Musk-led Bitcoin network’s environmental impact FUD.

Bitcoin has been in a consolidation phase for over a month now after reaching a new ATH of $64,837, it recorded a sharp correction soon after falling over 20%. The recent sell-off was attributed to several factors including declining institutional interest.

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Will Bitcoin Price Suffer?

A similar power outage in China last month saw the Bitcoin mining hash rate drop by over 25% leading to another major market sell-off. The last hashpower fud was also marred into a lot of controversies as many claimed different reasons for the power outage and the amount of hash power decline.

Bitcoin price is currently trading just under the $49K mark with a 2% decline over the past 24 hours. With every major sell-off in the market, many have called it a short-term price top, but on most occasions, bitcoin has defied the odds to bounce back to new ATHs. On the other hand, Bitcoin adoption has continued to flourish as many public companies have announced Bitcoin purchases over the past month. Apart from Bitcoin, manor altcoins including ethereum, Litecoin have also registered a minor decline falling over 5% in the past 24 hours.

To keep track of Crypto updates in real time, Follow us on Twitter & Telegram.

Disclaimer
The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
An engineering graduate, Prashant focuses on UK and Indian markets. As a crypto-journalist, his interests lie in blockchain technology adoption across emerging economies.

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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://coingape.com/bitcoin-hashrate-major-chinese-mining-pools-drops-rapidly/

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Blockchain

Coinbase finally releases a timeline for listing Dogecoin

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Since Coinbase’s direct listing, it released the transcripts of its Q1 Earnings Call. During the call, the company addressed its plans of listing Dogecoin (DOGE), thanks to its ever-rising demand.

Coinbase‘s CEO Brian Armstrong talked about the exchange’s plans for the memecoin. He stated:

“So, to answer your question directly, we plan to list DOGE in the next six to eight weeks. And then more broadly, we’re going to be focused on how we can accelerate asset addition in the future.”

With regard to queries on what parameters were used to qualify various coins or tokens to add to the exchange and why there weren’t more choices? Armstrong stated:

I think there’s going to be millions of different crypto assets out there, especially as we see new assets being created for new companies being created and there’s even NFT’s and individuals who are tokenizing their time and so in a world where there’s going to be millions and millions of these crypto assets out there, we get this question a lot, how are you deciding, which ones to add, and how can you accelerate it?

Without directly alluding to XRP, the digital asset that has been entangled in a legal battle with the SEC, Coinbase CEO also stated that Coinbase had worked with CRC to create a regulatory framework for coins. He added:

So, today, we use a number of factors, we look at cybersecurity around the coin to make sure that there’s not going to be an issue that would cause customer loss. We also look at it from a legal point of view and a compliance point of view. There’s various concerns out there about securities, for instance, and we’ve worked with things like the Crypto Rating Council to help create clear regulatory frameworks for this.

Data from ICO Analytics stated that the total web traffic for crypto exchanges had increased by 43% over the past month.


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Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://ambcrypto.com/coinbase-finally-releases-a-timeline-for-listing-dogecoin

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