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Coinbase ‘Pro’ Platform Is Met With Mixed Reviews.

The Move From GDAX To Coinbase Pro

Coinbase – Say goodbye to GDAX and hello to Coinbase Pro, as Coinbase has finalized the transition of the old platform to the revamped ‘Pro’ exchange on Friday.

GDAX, one of the most popular cryptocurrency exchanges, will now be inaccessible, redirecting visitors of the old website to the new platform. All GDAX balances and trade logs will be accessible on the new site, helping the seamless migration of vital information onto Coinbase Pro.

According to a post released by David Farmer, the general manager of Coinbase Pro, Coinbase Pro was built on top of the exact same trading engine which GDAX used.

Farmer elaborated, writing:

Coinbase Pro is a new interface built on top of the existing GDAX trading engine that has been designed with the needs of the active trader in mind.

GDAX was well-known for its ease of use and its quick response times, helping it become one of the most dedicated platforms for fiat to cryptocurrency trading. Many hope that Coinbase Pro will closely emulate what the old platform had to offer.

“GDAX Is Clearly Quicker.”

Although seen as a positive move by some, many users were outraged with the changes that were made on the platform. The change saw the removal of features and key statistics, along with a redesign that irked many consumers. 

A Twitter user took to Coinbase Pro’s transition Tweet to give his opinion on the new platform, pointing out the UI issues, especially with the mobile versions.

Thiago Predebon, another Twitter user, doubled down on this opinion, writing:

When mobile app or mobile website? Your current website experience sucks on mobile.

It seems that users aren’t only having problems with mobile UI, but also with a desktop version. ConfusedCoin issued a Tweet pointing out the key UI issues, including bright colors and difficulties choosing specific trading pairs.

As aforementioned, many expected for Coinbase Pro to perform in a similar manner in comparison with its predecessor.

However, according to BTCKyle, Coinbase Pro is actually a substantial performance downgrade in comparison to GDAX, with the Twitter user noting:

You would think that the upgrade would be better? GDAX is clearly quicker. PRO market books FREEZE all the TIME. How can one trade like that?

Brian Chavez also pointed out the lag in the depth chart, posting a short video of a slow and hard-to-use feature on the website.

There is a chance that Coinbase was not prepared for the transition, which migrated GDAX’s hundreds of thousands of users onto the new platform.

To address the complaints, Coinbase Pro went on Twitter to issue an announcement about feedback, stating, “If you’re a current Pro user – we’d love your feedback on how we can make the platform the best venue for trading digital assets,” issuing a link for customer feedback.”

It is still unclear why Coinbase decided to make the transition. However, some have speculated that the exchange wanted to bring GDAX closer to the Coinbase name, renaming it to better fit its parent company.

But many still hope for the success of the now Coinbase Pro, as it has become an essential part of the fiat on-ramp, which is so important to the cryptocurrency industry.

Title Image from Negative Space at Pexels

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Ethereum’s Price Drop Possibly Due To Large ETH Sell-Off By EOS, Report Says

The price of Ethereum (ETH) has fallen today, May 28, with tech site TrustNodes blaming the drop on a large sell-off ETH on crypto exchange Bitfinex that they attribute to EOS.

ETH/USD

Crypto Twitter persona WhalePanda also weighed in with a similar opinion about EOS’s role in today’s ETH sell-off:

Ethereum is currently trading around $515, down 8.49 percent over a 24 hour period to press time.

Value

Earlier this month, TrustNodes reported that EOS spent around $950 mln in ETH over the previous 30 days, according to a third party analysis of data from crypto data feed Santiment. Today, TrustNodes writes that around 180,000 ETH was traded in one hour on Bitfinex, as opposed to the 20,000 ETH per hour usually recorded by Bitfinex and exchanges GDAX and OKEx.

TrustNodes suggests that EOS is the party trading the large amount of ETH, as they note that EOS has spent $1 mln in ETH four days ago, and today the number is raised to around $1.4 mln.

TrustNodes

Image: TrustNodes

Etherscan shows that wallet address marked as EOSCrowdsale still has around 200,000 ETH, and wallet address marked EOS-Owner around 916,000, together equaling over 1.1 mln ETH.

According to data from CoinMarketCap, Bitfinex has traded in around $238 mln in ETH over a 24 hour period at press time, while OKEx is less than half of that at around $104 mln, and Huobi at around $98 mln.

Ethereum Markets

EOS, which will launch their mainnet on June 2, is currently trading for around $12, down by over 4 percent over a 24 hour period at press time.

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Binance, Bitfinex and More: New York Launches 'Inquiry' Into 13 Crypto Exchanges

New York’s attorney general is taking a closer look at some of the world’s most popular cryptocurrency exchanges.

Attorney General Eric Schneiderman announced the “Virtual Markets Integrity Initiative” on Tuesday, saying it was “a fact-finding inquiry into the policies and practices” of cryptocurrency trading platforms. Letters were sent to 13 exchanges, seeking information about their “operations, use of bots, conflicts of interests, outages, and other key issues,” according to a press release published on Tuesday.

“With cryptocurrency on the rise, consumers in New York and across the country have a right to transparency and accountability when they invest their money. Yet too often, consumers don’t have the basic facts they need to assess the fairness, integrity, and security of these trading platforms,” Schneiderman was quoted as saying.

Letters were sent to the companies that operate GDAX, Gemini, bitFlyer, Binance, itBit, Gate.io, Huobi.Pro, Bitfinex, Bitstamp, Bittrex, Kraken, Tidex and Poloniex (the latter of which was recently acquired by Circle).

According to Schneiderman, the inquiry is also focused on key issues such as “internal controls and safeguards to protect consumer assets.” In statements, Schneiderman’s office said that the effort would also focus in part on the exchanges that explicitly do not operate in New York because of regulatory concerns.

“We are aware that certain trading platforms have formal rules barring access in New York and may not have a license to engage in virtual currency business activity in New York. Among other topics, we are asking platforms to describe their measures for restricting trading from prohibited jurisdictions,” the announcement stated.

Eric Schneiderman image via a katz / Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Coinbase to Let Users Withdraw Funds from Bitcoin Forks

Cryptocurrency startup Coinbase said Thursday that, in the coming months, it will let customers withdraw funds resulting from forks of the bitcoin network.

In a blog post, the startup announced that it was adding withdrawal support for the forks, though the post did not announce a firm timeline.

“This change will allow customers to more easily withdraw assets associated with Bitcoin Forks across all Coinbase Products,” the startup wrote, adding:

“As always, we look at technical, operational, and legal considerations when deciding which Bitcoin Fork assets to support and will always state on our website which particular assets are supported.”

That being said, Coinbase noted it was “not announcing support for any specific assets at this time.”

In the announcement, Coinbase explained that it will work to support future bitcoin forks on its Coinbase Custody product, adding that this platform “will likely support more forked assets than GDAX or Coinbase for the foreseeable future.”

GDAX, its digital assets exchange, will allow customers to withdraw bitcoin forks, but not trade them. Similarly, Coinbase’s basic platform will also allow customers to withdraw the forked assets but without enabling trades. Further, the startup noted that an asset may be added to GDAX in the future without being added to Coinbase.

Coinbase Commerce, a merchant-focused service it unveiled in February, will not support any forked assets, and the Coinbase Index Fund will not list any assets that are not available on GDAX for trading, according to the statement.

In a separate announcement on Thursday, the startup unveiled a new early-stage venture fund that will provide financing to companies working with the technology.

“At least in the beginning, our goal is simply to help the most compelling companies in the space to flourish,” Coinbase said.

Coin miniatures image via Shutterstock

The leader in blockchain news, CoinDesk is a media outlet that strives for the highest journalistic standards and abides by a strict set of editorial policies. CoinDesk is an independent operating subsidiary of Digital Currency Group, which invests in cryptocurrencies and blockchain startups.

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Coinbase ‘Paves Way’ For New Altcoin Support With ERC20 Upgrade

Coinbase has announced its intention to support ERC20 tokens on its exchange, reversing previous statements from January, in a blog post published March 26.

In the post, Coinbase said its decision to support ERC20, which is the technical standard used for smart contracts on the Ethereum blockchain and the protocol used for many of the thousands of altcoin assets in existence, “paves the way for supporting ERC20 assets across Coinbase products in the future.”

The move comes several weeks after the US’ largest exchange and wallet provider added ERC20 token support to its Ethereum wallet and DApp (decentralized application) browser Toshi.

The announcement came with a conspicuous pledge not to reveal any likely altcoin candidates for future hosting.

A previous post last updated March 17 reiterated new asset additions would be done under stringent controls, a commitment that followed December’s highly controversial addition of support for altcoin Bitcoin Cash, which saw Coinbase accused of insider trading.

A month later, CEO Brian Armstrong stated publicly in the first incarnation of the asset addition blog post that neither Coinbase nor its sister exchange GDAX would seek to offer any new cryptocurrencies.

“As of the date of this statement, we have made no decision to add additional assets to either GDAX or Coinbase. Any statement to the contrary is untrue and not authorized by the company,” he wrote Jan. 4.

“Coinbase will only list assets after they are listed on GDAX,” the latest announcement meanwhile continues, also stating:

“After evaluating factors such as liquidity, price stability, and other market health metrics, we may choose to add any ERC20 asset added to GDAX to the Coinbase platform.”

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Ethereum Blockchain ERC20 Tokens To be Supported by Coinbase

One of the leading crypto-exchange platforms with HQ in the US – Coinbase has declared that it is planning to create a supportive infrastructure for the ERC20 tokens which are based on Ethereum’s blockchain sometime in the next months.

Used for Ethereum [ETH] smart contracts, the ERC20 tokens are a technical standard which assets gave the opportunity to various teams to build very speedy interoperable contracts. Not long ago, Toshi – Ethereum Decentralized application browser and Ethereum wallet added-up support for the ERC20.

Coinbase’s Custody will be balancing out and measure a set of assets planned to be supported for withdrawals and deposits.

Accordingly, the team backing up GDAX will be patient and see more regulatory clarity to jump by before taking any decision as to which ERC20 assets to be supported on the platform.

“This paves the way for supporting ERC20 assets across Coinbase products in the future, though we aren’t announcing support for any specific assets or features at this time. We are announcing this both internally and to the public as consistent with our process for adding new assets.”

“Additionally, like GDAX, support for ERC20 will also give us a path to enabling the safe recovery customer ERC20 assets inadvertently sent to Coinbase Ethereum addresses.”

Coinbase will only list assets after they are listed on GDAX. After evaluating factors such as liquidity, price stability, and other market health metrics, the company may choose to add any ERC20 asset added to GDAX to the Coinbase platform. Which means that GDAX will conclude with more assets being listed as listing on GDAX is not a safe guarantee to say that it will be listed on Coinbase too.

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Volumes on Most Major Cryptocurrency Exchanges Are Fake or Inflated: Study

Earlier this month, cryptocurrency trader Sylvain Ribes investigated into the volumes of most small-scale cryptocurrencies and discovered that the trading volume of OKEx, the fourth largest cryptocurrency trading platform in the world, is mostly inflated.

Inflated volumes

Ribes, who initially set out to conduct a study on the liquidity of cryptocurrencies and digital assets, utilized a method he named “slippage” to test the order book of each cryptocurrency trading pair. The slippage method by tests the liquidity of digital assets by selling $50,000 worth of each asset across various exchanges.

After selling $50,000 worth of a cryptocurrency, Ribes measured the rate of decline of that particular cryptocurrency on a certain exchange to measure its liquidity. Ribes implemented this method to test the liquidity of cryptocurrencies on OKEx, Bitfinex, Kraken, and GDAX.

Operated by OKCoin, formerly the largest cryptocurrency exchange in China prior to the local government’s crackdown on trading, Hong Kong-based OKEx briefly became the biggest cryptocurrency exchange internationally, as reported by Cointelegraph, overtaking Binance in March 2018. At the time of reporting, OKEx remains among the four largest trading platforms, alongside Binance, Huobi, and Bitfinex.

Bitfinex, Kraken, and GDAX are regulated cryptocurrency exchanges that allow cryptocurrency-to-fiat trading. GDAX was founded and is currently being operated by Coinbase, which has more than 20 mln users and is the most widely utilized Bitcoin wallet. Kraken is based in San Francisco, while Bitfinex is based in Hong Kong, alongside OKEx and Huobi.

According to the chart below, Kraken and GDAX, which are mostly utilized by users to process cryptocurrency-to-fiat trades, deposits, and withdrawals, recorded the smallest slippages, signaling that the two exchanges have sufficient liquidity to deal with relatively large sell-offs, in the range of $50,000 to $100,000.

Pic

Image source: Blog post of Sylvian Ribes on Medium

However, the rate of slippage on OKEx, supposedly one of the largest cryptocurrency exchanges in the world, was substantially higher than that of the three fiat-processing cryptocurrency exchanges.

Large slippage, manipulation possible

On GDAX, a sell off of $50,000 worth of a particular cryptocurrency only led to a slippage of around 0.1 percent, as seen on the blue dots on the chart above. However, $50,000 sell offs on OKEx led to massive slippages, as the value of cryptocurrencies fell and order books became unstable.

On a blog post detailing his findings, Ribes stated that the research has shown how the volumes of OKEx and other cryptocurrency-only exchanges are fabricated and inflated, given that a small amount of sell orders can manipulate the order books and prices of cryptocurrencies.

“The chart is striking. It shows how, although all first three exchanges seem to behave rather similarly, OKex pairs, in red, all have a massively higher slippage with regards to their volume. Like I explained before, this can only mean that most of the volume OKex claims is completely fabricated.”

Moreover, Ribes revealed that the chart above excluded slippages of over 4 percent. The chart provided by Ribes below, which includes slippages of more than 4 percent, show the shallow order books and low liquidity of OKEx.

Pic

Image source: Blog post of Sylvian Ribes on Medium

Mt. Gox and other factors influencing BTC price

On March 7, 2018, cryptocurrency analysts including Alistair Milne stated that the sell off of hundreds of millions of dollars in Bitcoin has led the price of the cryptocurrency to crash down to $8,300. Cointelegraph released an in-depth analysis on the matter, dissecting the impact Mt. Gox bitcoin sell-off had on the market over the past few weeks, and its continuous effect on the entire cryptocurrency market.

Despite the massive amount of Bitcoin he holds, Mt. Gox trustee Nobuaki Kobayashi dumped tens of thousands of dollars in Bitcoin in the public market, on cryptocurrency exchanges rather than over-the-counter (OTC) markets. The abrupt sell-off of nearly 32,000 Bitcoin led to a domino effect across all major cryptocurrency exchanges, and the price of Bitcoin fell as it caused panic within the public market.

Evidently, the Bitcoin market was not solely impacted by the sell off of Mt. Gox Bitcoins. It was a combination of many factors including the US government hearing on initial coin offerings (ICOs), negative mainstream media coverage about traditional finance experts criticizing the cryptocurrency market, and fear, uncertainty and doubt from Japan. The mixture of these factors alongside lack of momentum led the price of Bitcoin to decline.

Easy to distort volumes and price

In illiquid markets and trading platforms with inflated volumes, it is relatively easy to manipulate the price of small cryptocurrencies. While it takes many major factors and an unlikely correlation of events to bring down the price of major cryptocurrencies like Bitcoin and Ethereum, Ribes’ research demonstrates that a similar result can be achieved in a market with small cryptocurrencies with capital in the range of $50,000 to $100,000.

Ribes further emphasized that illiquid pairs did not just include small cryptocurrencies, but trading pairs of major cryptocurrencies like NEO and IOTA which boast market caps of over $3 bln can slip by more than 10 percent merely with a sale of $50,000.

“Many pairs, albeit boasting up to $5 mln volumes, would cost you more than 10 percent in slippage, should you want to liquidate a mere $50,000 in assets. Those pairs included, at the time of the data parsing (March 6, 2018): NEO/BTC, IOTA/USD, QTUM/USD. Hardly illiquid or low-profile assets,” Ribes added.

Changpeng Zhao, the CEO at Binance, the world’s largest cryptocurrency exchange, stated that the research of Ribes is a “good in-depth analysis” of the cryptocurrency market.

The cryptocurrency industry is still at its early stage, and digital assets remain highly volatile. Inflated and fabricated trading volumes on major cryptocurrency exchanges need to be highlighted and acknowledged, to obtain a better visualization of actual liquidity within the cryptocurrency market.

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Centralized Cryptocurrency Exchanges, Explained

What is a Centralized Cryptocurrency Exchange?

It is an online platform and most common way to trade cryptocurrencies.

 

This includes buying/selling cryptocurrencies with fiat (fiat/crypto paring) as well as buying/selling cryptocurrencies with other cryptocurrencies (crypto/crypto pairing). They can be viewed as an online marketplace for the entire cryptocurrency network.

What does it mean for an exchange to be centralized?

To be centralized means to trust somebody else to handle your money.

 

In the past, the word “centralized” was a given for all institutions that managed finances.
To be centralized means that there is a trusted middleman to handle whatever asset may be in a trade. In a bank, for example, a customer gives their money over to the bank to hold for them. This one institution is now in complete control of the customer’s money.
In many cases, this is much safer than a person finding some way to manage themselves. Banks have many securities and a team to watch over their customers’ money. The bank can also offer a variety of services, such as loans, because the bank has a large amount of money and has created a trust relationship with the customer.

pic

Centralized cryptocurrency exchanges are no different. A user can store their money on the exchange. The currency is now in the hands of the exchange, but the trust of the middleman makes it easy for a customer to recover a lost password or 2FA because that customer has given the exchange full access to their account. This can also take the pressure off of the customer of being 100% in control of their money. There are many stories of investors losing hundreds of thousands of dollars because they lost the private keys to their hardware wallet. If their money were in a centralized exchange, they wouldn’t have to worry about that; recovering would be as easy as showing a passport or verifying identification.

How does centralized exchange differ from a decentralized one?

Cryptocurrencies and blockchain are decentralized by nature, so this allows for the exchanges to also be decentralized.

In simple terms, a decentralized cryptocurrency exchange (DEX) cuts out the middleman by creating a highly intelligent “trustless environment.” Deals are made through smart contracts and atomic swaps so that currency never passes through the hands of an escrow service – it’s just peer-to-peer. DEXs are still in infancy and not very popular just yet, but 2018 might see a lot of progress with decentralized exchanges.

Do all centralized exchanges provide fiat/crypto pairings?

No.

All exchanges have crypto/crypto pairing (i.e., trading 1 BTC for 9 ETH), but not all have fiat/crypto pairings (i.e., trading $900 for 1 ETH). One of the most popular exchanges that provide fiat/crypto pairings are:

  • Coinbase – most popular in the world- supports Bitcoin, Bitcoin Cash, Litecoin, and Ethereum

  • Gemini – Based out of New York and high regulation standards for the US. Supports Bitcoin and Ethereum

  • Kraken – Kraken has a variety of crypto/fiat pairings with more than just USD and EUR, which can be viewed on their site.

  • Robinhood – a popular trading app provides fiat pairings to Bitcoin and Ethereum.

Is volume important for exchanges?

The more volume there is on an exchange, the less volatility and market manipulation there will be.

If Alice is trying to buy 1 BTC for the exchange’s current price of $10,000 and the volume on the site is extremely high, chances are she will buy the 1 BTC almost instantly. If the market price is $10,000 on a very low volume site, she may eat up all of the sell orders that are at $10,000 before she can buy her whole Bitcoin. Then Alice would need to buy the higher sell orders to satisfy her order, losing money and also making the price of Bitcoin go up on that exchange.

Are centralized cryptocurrency exchanges safe?

No centralized exchange is immune to hacks.

Many hacks have occurred throughout the course of cryptocurrency history, but in many cases, the exchange went out-of-pocket to pay customers back for the stolen money. DEXs are impossible to hack, but users are much more vulnerable to locking themselves out of their money. Popular centralized exchanges are safe in the way that banks are safe.

Is verification required to open an account on an exchange?

The regulations of each country are still fuzzy, but exchanges around the world require minimum verification to authenticate the account.

Many exchanges allow users to open an account without an identity check, but those accounts will have extremely small withdrawal/deposit limits. Basic verification normally requires a picture of the user’s passport/ID, and 2 Factor Authentication enabled. 2FA is a secret password that regenerates every thirty seconds or so that is needed every time a user logs into their account. 2FA is normally kept on the user’s phone.

Which exchanges have the most volume and crypto pairings?

While exchanges are still new and growing more and more popular each day, there have been some over the past 2017 year that have stood out in volume and amount of coins to trade.

  • Binance. While Binance has only launched in 2017, it has already begun trading the highest volume of any exchange. This exchange is based out of China and is so popular that most altcoins first move to this major exchange after their ICO. Level two verification allows 100 Bitcoin withdrawal while Level one allows under 2 Bitcoin withdrawal/day.

  • Bittrex. Bittrex has been a long-standing cryptocurrency exchange based out of the United States. While the most popular coins traded are BTC and ETH, Bittrex holds over 250 trading pairs. It is known for its easy interface for crypto beginners.

  • Bitfinex. Located in Hong Kong, Bitfinex is another long-standing cryptocurrency exchange which still lies in the top ten for trade volume.

  • Upbit. While many South Korean crypto exchanges have suffered during the crackdown on crypto in the country, UpBit stayed on top and even broke a record back in January of 2018 for highest trading volume ever.

  • GDAX. The Global Digital Asset Exchange is an extension of CoinBase, one of the most popular exchanges in the world. GDAX is not suitable for beginners but is very useful for margin trading as well as trading crypto/fiat and crypto/crypto. Users are also insured up to $250,000 by the Federal Deposit Insurance Corporation (USA). While offering many more options and features than its sister company Coinbase, Vice President Adam White of Coinbase noted: “Coinbase is designed for retail customers while GDAX is focused on serving sophisticated and professional traders.”

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