(27th-December-2019)
Fiat or fiat money — “is a currency without intrinsic value that has been established as money, often by government regulation. Fiat money does not have use value, and has value only because a government maintains its value, or because parties engaging in exchange agree on its value”, Wikipedia. For example, dollars or Euros are fiat money.
Cryptoasset — is a digital asset which utilises cryptography, peer-to-peer networking, and a public ledger to regulate the creation of new units, verify transactions, and secure the transactions without the intervention of any middleman. There are 4 types of crypto assets:
Cryptocurrency (e.g. BTC)
Platform tokens/cryptocommodities (e.g. ETH)
Utility tokens (e.g. OMG)
Transactional tokens (e.g. Stellar)
Volatility — “In finance, volatility (symbol σ) is the degree of variation of a trading price series over time as measured by the standard deviation of logarithmic returns”, Wikipedia
Deposit — amount of fiat money you have decided to put into crypto exchange to buy cryptocurrencies
Withdrawal — amount of cryptocurrencies you have sold for fiat or transferred to another exchange
Order book — a ledger containing all outstanding orders-instructions from traders to buy or sell bitcoin.
Find arbitrage opportunities
Arbitrage is is the practice of taking advantage of a price difference between two or more markets. For example, an arbitrage opportunity is present when there is the opportunity to instantaneously buy something for a low price and sell it for a higher price.
To find an arbitrage opportunity is an essential step. There are two major kinds of the crypto arbitrage:
Arbitrage between exchanges and
Arbitrage within an exchange.
Let us have a look at each of them and consider pro’s and con’s.
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