FIXING THE ALT/BTC PAIRING PROBLEM IS IMPERATIVE TO THE SUCCESS OF CRYPTO
There has been a huge problem in Cryptopia since day one and it is rarely discussed and rarely mentioned in terms of fixing.
Q: The problem with pairing the value of an altcoin (cryptocurrency) to BTC, ETH, XRP or any other currency for that matter is very simple.
A: Volatility
In order for Cryptocurrencies to be taken seriously and adopted by the world at large, as part of the crypto community, we must fix this issue as soon as possible.
The reality of the situation is that Bitcoin simply is not going to be a stable currency anytime soon. When Bitcoin rises - Altcoins fall. When Bitcoin falls - Altcoins surge.
When we see an image like the one below, by nature, we get excited and forget that the value in terms of dollars remains unchanged.
Excited? Probably yes at first glance - Then go check your portfolio value in dollars and it is unchanged. This is simply due to the fact that these altcoins appear to be rising in value, but really are a product of the pairing ALT/BTC flaw.
If we do not have a stable currency such as USD to pair against - such as stocks are paired against USD in trading exchanges such as NASDAQ - than there will be never be an accurate measure of an altcoin valuation.
This is a deep problem that needs some very forward thinking minds well versed in economics, crypto, trading, and currency. All I know at the moment is that many new traders, including myself when I first started trading altcoins - was easily fooled into thinking that a value was increasing or decreasing. It seems that it would not be difficult to use an algorithm based on the real time volatility of BTC to correctly value altcoin cryptocurrencies to be traded in exchanges or to simply have a relative, accurate valuation.
PLEASE SHARE YOUR THOUGHTS, EXPERIENCES AND POSSIBLE SOLUTIONS TO THIS MAJOR PROBLEM
As always thank you for reading and if you enjoyed the content - please Upvote, if a lightbulb went off please Comment, if you'd also like to solve this problem for the greater good of crypto - Resteem
Love,
The reason why I tag the names below simply is because I KNOW these users are honest people that are involved in STEEMIT to better this Forum, Crypto in general and care about the future of Cryptocurrency sustaining long term growth and change to a veru broken world monetary system
@netuoso @jerrybanfield @craig-grant @trevonjb
ALL THAT UPVOTE RESTEEM COMMENT WILL RECEIVE A SMALL GIFT FROM @krytonika -
One 2SBD gift will be given to a random supporter of the post - likely a minnow with a comment that adds value to the topic :) KEEP STEEMIN!
(UPDATE 7-2-17) Yes I am fully aware of USDT - And in theory that is what is needed - however the primary pairing on almost all exchanges for the most coins available is always via alt/btc
Hmmm. I don't see the problem in evaluating altcoins in btc. What you describe is a very short term mechanical raise or decrease of altcoins because of btc fluctuation. But in the medium/long term we can see altcoins have a real value on their own.
If you take ETH for example, last year in August 2016, it was worth 0.02 btc. Now it is 0.08 btc. So ETH was only multiplied by 4 ? Not at all! Because if you convert to USD : August 2016 ETH was worth $12. And now it is worth $250. Multiplied by x20.
This shows that ETH has "its own life" even if btc is used to value it.
The solution to not be "fooled" might be to evaluate altcoins in USD directly.
But this would be problematic for exchanges I guess, there must be a financial reason why they systematically use btc. And I am interesting in knowing those reason, if anyone knows.
there is most definitely a problem. Look at the ALT's in the past week+, bitcoin has been surging hard but ALT coins like Stellar, ETH, XRP are all in a continuing freefall that is threatening to close peoples holdings. We're talking FREFALL... until this ridiculous hand-holding by btc is defeated once and for all, the ALT will NEVER have their ow identity.
True. It has been obvious for me especially the last months that ALTs mostly follows BTC. Wether it be upward or downard. Thats almost ridiculous how alts are bound to BTC. The example of ETH I was talking about was actually one of a few exceptions. And now ETH is just as linked to BTC as any other alt.
This invisible link means 2 things for me :
And that's sad for crypto. I hope it changes.
@eternalsunshine Thanks for responding - Do you have an exact date of ETH being $12 in August 2016? Bitcoin ranged from $465 to 600 in August 2016 - and $12/$465 = roughly .028 so the correlataion maintained. Today - Ballpark numbers ETH is around $250 - Bitcoin around 3000 - so 250/3000 = roughly .083.
The pairing should be exact always if used the way it has been - and like I said - even if the $ amount of a coin doesn't go up as Bitcoin surges - The % either lowers or greatens and many people roughly gauge a coins value by it ALT/BTC pairing %
Not long after righting the article I found the solution - well kinda - however am still perplexed why it's not used - THE USDT - USD Tether which has always maintained around the price of $1 somehow even tho you can potentially pump it I suppose -
So why was USD Tether created and rarely used on Exchanges? Why do some exchanges like corrupt Poloniex have 75 coins paired to BTC and 8 paired to USDT?
I think it would be easier for all and especially for widespread growth to be able to quickly see a value or bid wall in $ at all times.. Especially if the SEC will ever adopt EFT's or Support Exchanges by Federally backing their holdings as they do with banks -
The search continues - until then - I believe it is solely to confuse the new investor and allow whales to manipulate them more easily and for Exchanges to show false increases in value to get more money pumped into them
I hope a clever mind can explain this to us all :)0
PS - GO NEO!!!! (Formerly ANS AntShares) WAYYYYY PAST THE MOON
I checked ETH value with this link : https://www.cryptocompare.com/coins/eth/overview/USD
And choosed to see until 1Y ago.
So the 10th of August 2016 for example, it was $11.68.
This post has received a 0.85 % upvote from @booster thanks to: @krytonika.
Thanks for Share! like your post and love it!
Thanks @raiblove - Some SBD coming your way to say thank you for helping the cause - Please share this post and resteem if possible
Thanks.
Anytime Brother!
Great write up. Wondering if you suffer from blockfolio addiction too? - https://steemit.com/cryptocurrency/@cryptocoinclub/confessions-of-a-blockfolio-addict
lol
@cryptocoinclub - That is HILARIOUS!!
Fortunately I'm not quite in need of a 3 step program - with my job - it's a very very secure workplace that you cannot even bring a cellphone into - so I am not even to check any prices during 10 hours of 5 days a week.. The only time I am guilty of being a Blockfolio-Addict is when the Chinese wake-up and buy NEO like it's their last piece of rice.. I am a holder of cryptocurrencies not a day trader - I do as much research as possible prior to buying into a coin and then let it ride as I know the market is just too volatile to get upset over a 10% lost or ecstatic over a 25% gain -
As long as my coins are trending in the green month to month I am more than happy..
I'm sure there are tons of people as described in that link tho :)
Thanks dude! I've got a new addition now, although maybe I have gone too far this time. What do you think? https://steemit.com/cryptocurrency/@cryptocoinclub/blockfolio-addict-tragically-dies