Introduction to the development of currency tradin
From the perspective of financial development history, every development of custody clearing technology was born in the crisis. Compared with today's bear market environment, it also brings great demand for the improvement of custody and clearing technology for digital assets. It is also a key technology to solve consensus and trust. Bhex relies on the underlying bluehelix decentralized custody clearing technology to solve these problems. Important note: This article is purely an introduction to system software development, not a platform party.
1、 Introduction to the development of currency trading system:
1. What is currency to currency transaction (currency to currency transaction)?
The digital asset transactions we usually contact, Most of them use RMB (CNY) to price bitcoin, Wright coin and other digital assets, so using RMB to price bitcoin forms a BTC / CNY transaction pair (when one asset is used to price another asset, a transaction pair will be formed). The price of the transaction pair represents how many units of RMB need to be paid for buying 1 unit of bitcoin, or how many units of RMB can be obtained by selling a unit of bitcoin.
What if bitcoin is used to price Wright coin? How much bitcoin is a Wright coin worth? Currency to currency transaction refers to exchanging one digital asset for another. For example, LTC is priced by BTC, forming an LTC / BTC transaction pair. The price of this transaction pair represents how many BTCs need to be paid for buying 1 unit of LTC, or how many BTCs can be obtained by selling 1 unit of LTC.
2. What is the difference between currency transaction and traditional legal currency transaction?
Currency transaction and traditional legal currency transaction, traditional digital asset transaction, It is the exchange between digital assets and RMB (CNY). When bitcoin is bought in RMB, bitcoin will rise, so bitcoin can be used to exchange more RMB, otherwise the convertible RMB will become less. For example, when 1btc = 30000 yuan, buy 1btc, and when bitcoin rises to 40000 yuan to sell, 1btc will exchange 40000 yuan (CNY).
3. Advantages of currency to currency trading
Reduce the cost of switching currencies, provide arbitrage opportunities within the platform, enhance anonymity, and facilitate the conversion and circulation of digital assets. For example, in traditional digital asset transactions, digital assets are priced in RMB. That is to say, if I hold bitcoin and want to change it to ether, I need to sell BTC and pay a handling fee, then buy Eth and pay a handling fee. After two changes of hands, it requires twice the handling fee cost. Through currency to currency transaction, BTC can be directly replaced with eth, which is convenient, fast and low cost.
2、 How to make money in currency trading?
Use BTC → LTC for currency transaction as an example. Assumption: the current price of one BTC is 20000 CNY and the current price of one LTC is 500 CNY. In other words, a BTC can buy 40 LTCs, then 1btc: 40ltc = 1:1 = 1 example: if we buy LTC with one BTC, we have 40 LTCs and 0 BTCs. Let's use figure 1 to break down the asset changes brought by currency transactions to the customer's total funds.
Red indicates that BTC rises and LTC falls compared with the change of our total assets. In terms of the cost price of 20000cny, we lost 2000cny. Because BTC rises by 10%, our total assets can only be exchanged for 0.81 bitcoins.
Yellow indicates that BTC has fallen, and LTC has risen due to the change of our total assets. In terms of the cost price of 20000cny, we have made a profit of 2000cny. Because BTC has fallen by 10%, our total assets can be exchanged for 1.22 BTCs.
Green means that BTC rises, and LTC rises more than the change of our total assets. In terms of the cost price of 20000 CNY, we made a profit of 4000 CNY. Because BTC rises by 10%, our total assets can be exchanged for 1.09 BTCs.
The blue color indicates that the BTC has fallen. The LTC is equal to the change of our total assets. In terms of the cost price of 20000cny, we have made a profit of 0cny. Because the BTC has fallen by 10%, our total assets can be exchanged for 1.11 BTCs.
In currency currency transaction, there are two parameters, CNY and BTC, but for customers, they prefer the change of total asset CNY, so currency currency transaction can provide more appreciation space for the currencies held by customers.