Visit: What is behind the brush of the digital currency exchange?
Recently, TokenInsight released the blockchain industry report "Exchange Real Estate Volume Report (I)" pointed out that nearly half of the digital currency exchanges have serious brushing behavior.
TokenInsight's own data center has obtained the BTC-USD(T) transaction of the mainstream exchange, and has recorded all the transactions from July, and analyzed the data using the self-developed quantitative analysis model based on power law distribution .
The results of the model show that 36% of the exchanges (11) have a real trading volume ratio higher than 80%; nearly 50% of the exchanges (14) have less than half of the real trading volume.
The brushing behavior of digital currency exchanges has long been a concern.
In March 2019, Bitwise stated in a report to the SEC that the bitcoin market “brushing” behavior was serious. The real market volume was about 4.5% of the reported transaction volume, and only 10 exchanges were able to report real trading volume.
This report is the first time that research institutions have published research on “brushing volume” through public channels , and market participants are shocked by this result.
In April of the same year , BTI released the digital currency exchange "Market Supervision Report".
According to the report, all 17 of the top 25 transactions in CMC (CoinMarketCap) have 99%+ false trading volume, and 35 of the top 50 exchanges in the adjusted trading volume have more than 99.5% .
In July of the same year, market liquidity and over-the-counter provider Alameda Research released relevant research reports and continued to publish real trading volume monitoring data.
The results show that at present ( September 25, 2019), 66.4% of the cryptocurrency market is a false transaction.
Alameda Research has three conclusions about the authenticity of the exchange's reported volume: credible, 50% credible and untrustworthy.
We can easily see that the brushing behavior of digital currency exchanges seems to be an internal consensus.
The intra-row consensus stems from the “unspoken rules” of most default trading volumes in the currency circle . This makes many exchanges happy. After all, the amount of brush transactions can be seen by more users, increasing exposure and visibility, and attracting more people to participate in the transaction.
Compared with marketing, promotion and expanding the community's costly and slow propaganda channels, no one at the moment will deny that this is a good way. Lu Xun said, "There is no way in this world. It has become a road, and it has become a reality here.
According to SimilarWeb data, the vast majority of those brushed exchanges received up to 90% of the recommended amount from the CMC ranking interface .
This situation is also one of the reasons why countries' regulation of the encryption market has become more stringent in recent years. Typical reactions are the US Securities and Exchange Commission.
Jay Clayton, chairman of the Securities and Exchange Commission , once said that " investor protection " is the main reason why regulators face bitcoin ETFs."
At this time, we must not only ask: Who should solve the "deception" of the digital exchange for users ? Is the exchange that is “precipitated” in this form beneficial in the market?
In fact, on some levels, this issue can be answered by the mechanism of the market “big waves”.
First of all, the digital currency trading market still follows the principle of “big fish eat small fish”.
Large exchanges invest in mergers and acquisitions that select small exchanges. In this case, a number of exchange giants with complex ecosystems will be born. They will lay out upstream and downstream areas such as media, mining, and wallets, and build their own blockchain ecosystem.
Secondly, the market's "invisible hand" will cooperate with the government to supervise this "invisible hand" whenever and wherever.
For the time being, mainstream exchanges such as Coin, CoinBase and Firecoin have opened offices, local stations and even French exchanges in countries with relatively clear regulatory policies.
In the case of the currency security, in March this year, the headquarters was moved to Malta, where the policy was relatively friendly. Since then, it has been announced that Uganda, Liechtenstein, Singapore and other countries will open a legal currency exchange.
Last but not least, the “ fighting ” of the new digital currency exchanges and the old exchanges that are constantly entering the market are mostly in the circle, the market is limited, and the growth of users in the circle is weak.
What happens in this situation? In most cases, the new digital currency exchange has only acted as a “squid” in the “tuna”, providing a stronger sense of competition for established exchanges and thus maintaining vitality.
Why is the new digital currency exchange a "squid"?
The reason may be simple, because it is really difficult for the new digital currency exchange to grab customers with established exchanges.
Contrary to the exchange's interest binding and user habits, unless there is a high interest temptation, such as the level of FCoin, it is difficult for users to transfer funds to other exchanges for trading.