The evolution in ERC20 and the era of ERC223

The ever evolving Ethereum Blockchain brought to Cryptocurrency and ICO investors a new gift, the ERC223 a new standard for tokens created on Ethereum. Up until now the newly created tokens on Ethereum public Blockchain should have followed the ERC20 convention. This by all means was a huge success and relief for both token owners and the investors for that token. ERC20 makes sure the behavior of the token on Ethereum is standard with a defined common list of rules. The ERC223 is an improvement of ERC20 protocol, and is backwards compatible to ERC20, meaning every wallet and software that supports ERC20 does work with ERC223. So to get a better picture from this improvement, maybe its better to breakdown how these tokens are created and lets start with the ERC20 tokens.

ERC20 and how does such tokens are created? 

ERC20 protocol allows token owners and developers to create a token that complies with common, essential behavioral rules. The standard is now very popular, specially among ICO investors and their communities. Thanks to ERC20 investors can be certain that the following statement can be true if the token is ERC20:

  • Technically tokens can be accepted by almost all exchanges
  • Tokens are transferable, and all Ether wallets will automatically store the newly created tokens
  • Transactions using that token is done smoothly

A token is compliance with ERC20 if the developer of the token contract implement the following interfaces:

  • The token name with function name, it returns the name of the token.
  • The token symbol with function symbol, it returns the symbol that token will use.
  • The token decimal places, function that returns the unit8 decimals the token uses.
  • How much the owner want to start off with: function balanceOf, it returns the account balance.
  • The amount of tokens in circulation: function totalSupply, it returns the total token supply.
  • The transfer value: function transfer (address _to, unit256 _value), this function is in charge of the transfer events. the function should revert a transaction if the sending account _from does not have sufficient balance.
  • The transfer from: function transferFrom, this function is used for withdrawal workflow, it allows contracts on the Blockchain to transfer tokens on token holder behalf.
  • The crediting permission, function allowance (address _owner, address _spender), it returns the amount which the buyer (_spender) is allowed to withdraw from the owner (_owner).
  • The events: with function transfer (address indexed _from, address indexed _to, unit256 _value) its triggered when a token has been successfully transferred and function approval (address indexed _owner, address indexed _spender, unit 256 _value) this must trigger on any successful call.

 

What did ERC223 has added to ERC20 and what are the advantages?

Initially the idea of ERC223 came to play when the amount of lost tokens on Ethereum Blockchain went sky rocketing, this was due to lack of possibility to handle incoming transactions. Ethereum Blockchain is a leading network for number of lost tokens. Top 8 ERC20 contracts with losses will come up to approximately 3 million USD worth of tokens. how does this happen? once an ERC20 token is sent to a contract that is not designed to work with that ERC20 tokens, the contract will not reject the tokens because the contract does not recognize an incoming transaction. Consequently the token will get stuck the that contract balance. ERC223 will allow users to only send their tokens to either wallet or contracts with the same transfer function, this way it prevents the loosing of the token. ERC223 introduces the function transfer (address _to, unit _value, bytes _data). This function transfers tokens with invoking the function tokenFallback in _to, only if _to is a contract. This will allow the smart contract to actively handle sent tokens. Whereas when an ERC20 token is transferred, the token contract is not notifying the receiver that the transfer has occurred, to that end the address receiver has no possibility to handle the incoming transaction and therefore no way to reject not supported tokens.

A seamless token transfer is another advantage of ERC223 over ERC20. An ERC20 transaction between a regular (not a contract) and contract are two different transactions. There two functions need to be triggered, first the approve function on the token contract and latter the transferForm on the other contract (the receiver). ERC223 has addressed this more efficiently by allowing to use the same transfer function. ERC223 could be sent by only calling the transfer function on the token contract with no if the receiver is a regular address of a wallet or a contract. Due to this shortcut another advantage that ERC223 has is the gas cost, ERC233 consumes almost half as much as an ERC token.

So as discussed above ERC223 advantages over ERC20 comes down to the following points:

  • provides a possibility to prevent accidentally losing tokens
  • Allows users to transfer tokens anywhere (owned address or contract) using one function
  • allows contract developers to manage incoming transactions, contract developers could implement contract in a way that only works with some specific tokens incoming and handling them in a specific way which could also each tokens could be handled in a specific way.
  • ERC223 consumes almost half gas as ERC20

Currently is not possible to upgrade existing ERC20 token contract to ERC223, but if you are planning to create your own maybe its a good idea to go with ERC223.

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Empirica is a Wrocław-based company that supports many local IT initiatives. Empirica is offering solutions such as Automated Trading Software implemented by major institutional investors in Poland, market making bot, wealth management software framework, crypto trading bots and trading software development for companies from capital and cryptocurrency markets.

 

 

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Bitcoin

What’s BITCOIN?

Bitcoin is known as virtual money, but a much better term is cryptocurrency. Unlike actual cash, there are not any coins or paper money formally produced. No government entity determines how much and when to discharge it in the world. Bitcoins are made digitally by individuals as they solve complicated math problems with their own computers. In most senses, it’s truly decentralized.

Among the intriguing things about the virtual money is that all trades are saved and printed publicly. The money is traded by means of a huge peer-to-peer network which encompasses the whole globe. When there are not a great deal of rules concerning Bitcoin, you will find a few, and this also assists with creating bitcoins a real currency that functions just like “normal money”

 

BITCOIN EXCLUSIVES

Next, we are going to have a look at a few of the ways which Bitcoin is different than conventional currencies. It is these differences which make Bitcoin this kind of potent potential. Nobody individual, government or corporation controls the Bitcoin network. This is not the sole difference, but so let us peek at some things which are exclusive to Bitcoin.

Bitcoin vs. Traditional currencies

  1. Bitcoin is decentralized

As it functions as a peer-to-peer system, all trades and confirmation of trades are done by several folks in the network.

  1. Bitcoin is virtual currency

Another thing which sets Bitcoin aside from conventional money is the fact that it is virtual. Rather, all bitcoins exist within virtual space. As a consequence, that you can not visit an ATM and withdraw bodily cash. Conventional currency which may be published when governments choose to publish more. To distribute the production of bitcoins being introduced into the planet, the amount that are made by “mining” will half each four decades. It follows individuals will continue to have the ability to make them before the year 2140. At that moment, no fresh bitcoins will be generated and the present design will enjoy the advantages of lack – i.e. getting more precious.

So as to save the block string of trades in consecutive Purchase, Bitcoin trades aren’t reversible. Furthermore, a Bitcoin trade can take ten minutes or longer to confirm. That is different compared to other currencies that normally procedure trades in seconds and allow for turning a fee to a credit or debit card.

  1. Bitcoin isn’t ubiquitous

In many areas, you’re going to have the ability to exchange your countries money for invoices of the country you are visiting. And regardless of where you go on the planet, you are likely to have the ability to exchange your money for services and goods. Bitcoin has not yet been adopted by the entire world at large. This will change in years to come as more companies start to take Bitcoin for repayment, but for now it is a gap that matters to lots of individuals.

 

Good and Poor of Bitcoin

As it is decentralized and normally has reduced prices for trades, a lot of men and women have started to take note and become enthused about this and other cryptocurrencies.

Another thing to notice is that a few People today worry about that controls the Bitcoin network. The fact is that because it utilizes peer reviewed technology, no 1 individual or business can have the Bitcoin network. This might seem frightening to some while it is exciting and revolutionary to others.

The demand for all variants of Bitcoin applications to be harmonious and be able success, most people that are involved realize that this and also have worked together to enhance the Bitcoin applications and community substantially in just a couple of short decades.

And that just might be what is equipped to assist Bitcoin grow much faster across the world. This may prove to be the fiscal system which brings the world together.

How Can BITCOIN WORK?

The basics you should know

Let us start by taking a look at the different items you want to get a cryptocurrency working. We are going to begin with the fundamentals and then move to more details about what you will have to begin.

The transaction – the very first thing that you want to think about using a digital currency is the trade – that the true exchange of value from 1 individual to another. Though this might seem easy, in several ways it can be simple to devise a trade to attempt and cheat the machine. With physical money, transactions are regulated by banking associations that affirm they are not forged and therefore are unique.

A serial number – to prevent people seeking to forge trades or reuse them with virtual money, you require a means to connect a special serial number to every individual and each trade too. Bitcoin does so by utilizing a personal and public encrypted secret. These hashes are utilized to create certain transactions are not replicated in the system and there is no way to cheat the system. When Bitcoin was set up, it had been understood that banks might be taken from the image entirely if a peer reviewed network was produced to confirm the transactions between two things. This decentralization of fiscal transactions is among the largest reasons so many clever men and women are becoming excited about Bitcoin.

Bitcoin Mining – The following bit is necessary to create Bitcoin work. When it’s too simple for trades to be confirmed, folks may program robots to flood the system with verifications, which makes it tricky to really check the transaction. To fight this, the notion is to make it computationally tough to check the transaction. This assists battle against the bad guys while at precisely the exact same time offering a means to reward individuals who provide up computing ability to check the transaction. The computational mystery needs to be tough enough to make it impossible to hack on simple enough to still enable individuals to resolve in a reasonable period of time.

Create a private and public key that’s unique for you. This can be used to move bitcoins for you also as enable you to move bitcoins to other folks in the network.

Speech if you would like to get BTC from somebody else on the community. At precisely the exact same time, you may use a different Bitcoin address created so as to cover services or goods.

The following step is a trade being created when the real swapping of BTC happens between a seller and buyer. This can be added to the block series where others are going to check the trade (by solving the mathematics problem) and publish particulars of this trade publicly.

 

The Way to OBTAIN BITCOIN

Recognizing how Bitcoin functions may be intriguing to some, but there are actually a couple of ways that you can lawfully get bitcoins – regardless of where you reside on the planet. Provided that you have an online connection as well as the Bitcoin software installed, then you are likely to have the ability to start using this digital money. The best news is that it is really rather simple to start to develop your Bitcoin wallet should you’ve got a little spare time.

First, It Ought to Be noted that it is really tough to buy bitcoins It is quite simple to issue a chargeback on charge card. If a person purchases BTC using a charge card then reverses the fee, it is really hard to prove to the credit card companies the trade actually occurred.

It is important to keep in mind that the worth of a single BTC is quite volatile at this time, which means you probably don’t need to spend everything you’ve got in this digital money. At precisely the exact same time, the prevalence of Bitcoin is increasing across the world and a number of people happen to be getting wealthy by building up big heaps of bitcoins virtually through method and means we will explain below.

Regardless of which kind of computer you are running, there is likely to become an installer app to get you up and running in almost no time in any way. Many men and women find it takes about 5 to 10 minutes to acquire a Bitcoin customer installed and attached to the community.

Make certain that you take your time to discover a client you are familiar with using. Most are extremely similar, but a few have a few additional bells and whistles which may make it much easier for you to begin.

Even though you might have the ability to discover a service which delivers a high degree of safety, it is not exactly the exact same level you would have if you set up the applications in your computer in which you have full control. Coinbase is among the very popular online Bitcoin wallets today.

Whichever you decide on, once it is set up the next step is simple. You will Create a private and public key. This is the Bitcoin speech which will enable folks to send BTC to your accounts. As soon as you’ve got your own Bitcoin wallet installation, you have a couple of distinct choices about the best way best to accrue BTC on your wallet.

Bitcoin Exchanges

Bitcoin exchanges were not about when Bitcoin first came out, but they are now an essential component of the way the entire Bitcoin ecosystem functions. There are exchanges which have Bitcoin among other digital currencies on the internet in addition to marketplaces that deal exclusively by BTC trades.

It is intriguing to note that some of those marketplaces will maintain a balance For you – out of your Bitcoin wallet – to be able to make it simpler to conduct transactions. Deciding on the ideal Bitcoin exchange is important when you would like to remain safe rather than risk losing your BTC equilibrium because of a scam or technical issues.

Security — the most essential aspect that you wish to consider is safety. In case a Bitcoin exchange is fresh to the world wide web and is lacking contact info, this is a great indication that they probably don’t care a lot about the safety of your private info. Fortunately, if you spend any quantity of time around the numerous Bitcoin forums and communities on the internet, you will see which exchanges suffer from issues and then exchanges are advised. As an instance, some Bitcoin exchanges may not let you withdraw money into a US bank accounts. It is a fantastic idea to ensure whatever market you are considering using has a means that you convert your BTC to the regional money safely and easily. In 2013, a few people started complaining about the amount of time that it required MtGox to move funds into the US, therefore it is a fantastic idea to once more hit on the forums and attempt to gauge public opinion about any trade you are considering using. Then let us have a glance at a few of the main Bitcoin Exchanges currently working. New ones are emerging all of the time, but it is usually a safer bet operating together with a single which has been in existence for some time and has managed to accumulate a history of being reliable and fair.

CoinBase — This is among the hottest Bitcoin exchanges right now. They give the capability to move money to US bank account. That being said, if you reside elsewhere in the world, you might not be pleased about being unable to move funds to the regional bank accounts.

MtGox — At once, MtGox was accountable for the vast majority of all Bitcoin trades on the Planet. This has changed lately as they have run into some legal issues in various nations around the world, but they are still an extremely popular Bitcoin exchange which a lot of men and women utilize on a daily basis.

BTC-E — This site is located in an unknown town in Bulgaria, and that means you may be careful about maintaining any BTC here. The costs per BTC are usually a whole lot lower, but that is only because it requires a ridiculous quantity of time to validate that a trade. Nonetheless, it’s a choice you may look at based on where you live now.

Bitstamp — This market is comparable to CoinBase at a great deal of ways. The most important distinction is they do regularly work with individuals in countries aside from the USA, which makes it effortless to move BTC to overseas currencies. If you’re searching for a really international Bitcoin exchange, this is a great place to get started. We mean you could exchange different cryptocurrencies too. If your digital money investments go beyond Bitcoin, then you will want to check out Cryptsy.

BTer — With slow trade speeds and limitations on how big trades, this is not really recommended, however we believed they deserved a place on the list only because they do serve the demands of some men and women who utilize Bitcoin.

BTC-China — Some of the quickest growing Bitcoin exchanges — based on Wired magazine — is BTC-China, that has ramped up their attempts lately. By some reports, they have overtaken MtGox since the location where many Bitcoin trades occur on daily basis.

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Empirica is a Wrocław-based company that supports many local IT initiatives. Empirica is offering solutions such as Crypto Algo Trading Software implemented by major institutional investors in Poland, market making strategy, wealth management software framework, crypto trading bots and trading software development for companies from capital and cryptocurrency markets.

 

 

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Ethereum

WHAT IS ETHEREUM?

Dapps are computer applications that eliminate the need for intermediaries in any present centralized service by enabling anybody to rely upon an anonymous counterpart to execute the most varied kinds of agreements and deals at a 100% electronic method.

In Ethereum, programmers may also write business logic and arrangements in the kind of smart contracts, which can be implemented automatically when their requirements are satisfied by both parties and educated to the community. These contracts may save information, send and receive trades and also interact with different contracts, irrespective of any controller.

At first, the expression “smart contract” was used to describe using computer systems (or other automatic methods) which aimed to influence particular agreements.

As an illustration of a clever mechanical arrangement, we could mention a machine which sells soft drinks or snacks. When you put a coin or note on those machines, a computer system programmed to spot the amount received along with the selected product enforces an arrangement between the customer and the machine operator, executing an automatic purchase.

The dapps and intelligent contracts operate from the Ethereum blockchain, which had its first architecture conceived with a young Russian genius in the time in age 19, called Vitalik Buterin, who picked the subsequent name due to his white paper: “Ethereum: A Platform of smart contracts along with next generation decentralized software”

From “second generation,” Buterin describes the instruments added to his creation that in theory can resolve in an easy and objective manner a number of bitcoin’s blockchain constraints and thus usher in stage 2.0 of their cryptocurrencies.

Everyone can upload programs or smart contracts into the Ethereum network. The platform development group sought to make everything as straightforward as possible to amplify accessibility to technologies.

As an application programmer, you may need anti virus infrastructure to install and install your own applications. Anything which may be represented mathematically could be mimicked, ensured, and exchanged through Ethereum. Once being written in a programming language approved by the stage, just upload the code onto the stage, fill in the first variables and ship. Following that, the task becomes the stage, which within a couple of seconds converts the code into machine language, compiled in bytecode, and afterwards mined it’ll have the ability to run.

Once uploaded, the arrangement is going to be saved from the blockchain and other customers will have the ability to get it directly via the system or via any API (Application Programming Interface) designed to get it. Because of this, the arrangement, depending on the identification of these terms established inside, will automatically meet the assumptions specified there and may, as an instance, ship or receive numbers from 1 individual to another.

Additionally, like bitcoin, with that you don’t need to rely upon a lender or central ability to maintain your fiscal funds protected; from Ethereum your private data, identity, and capital will also be under your control at all times, given inside your wallet. And of course that their software are also protected from denial of service attacks, because of the nature of its technologies.

Whats Ethereum good for?

Most of the services we use today have one factor in common: they’re centralized. So, for Example, you hope that your bank can keep your money secure, be audited independently and honestly.

The same goes with Facebook, when you carry an image of your kids, once you send a document to the Dropbox or even once you go to an appointment in the hospital and enroll from the health network your personal medical advice. If you work as a developer, you have to file your application to a program shop and you risk getting it removed for the most trivial and varied reasons.

History has continuously shown this centralized model is flawed, but essential to ensure levels of confidence between counterparts. Nonetheless, this is complex and too costly for everyone involved.

Remember that everything that’s centralized makes it easier to strike because it provides one Purpose for a goal, including a website firewall.

Applications built on Ethereum don’t require your customers to trust developers with personal information or money. Back in Ethereum, your personal information remains yours your funds remain yours and your articles stays yours. Because it is decentralized, its most important benefits are that it is a transparent, hackerproof system that’s constantly live.

Since Ethereum permits you to start your own currency, you can make any kind of company stock on the stage or represent ownership of any object, such as a car or a house.

You can think of this as a programmable dispersed system. The fact that Ethereum is, by its very design, resistant to fraud and adulteration, means that it offers a fresh range of solutions to the daily problems which are currently solved at exorbitant costs. Voting machines, domain registration, registration of legal records, medical applications, transfer of goods, services, smart property and contracts between individuals, standing systems and financial derivatives. Everyone these programs can be produced on a network where users keep track of their funds and individual data constantly.

A DAO is composed of a couple of contracts and could be funded by a group of individuals with similar notions. A DAO operates completely independent and transparent of any human intervention, for example its original creators. A DAO will stay in the community for so long as it covers its survival costs and supply a useful service to its customer base.

Ethereum also allows programmers to create, for example, different decentralized markets, shop debt documents or guarantees of payments, transfer funds according to previous instructions (for instance, a Purchase / sell purpose or a prospective contract), and several other items which have been Devised, all this automatically, without an intermediary or counterparty risk.

About us

Empirica is a Wrocław-based company that supports many local IT initiatives. Empirica is offering solutions such as Cryptocurrency Algorithmic Trading Software implemented by major institutional investors in Poland, market making strategywealth management software framework, crypto trading bots and cryptocurrency software development for companies from capital and cryptocurrency markets.

 

 

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Ripple

How does Ripple Work?

The Ripple protocol builds upon – and in some ways improves on – other digital currencies. Like other digital currencies, the Ripple protocol enables peer-to-peer transaction settlement through a decentralized network of interconnected computers. This eliminates several of the fees and counterparty risk involved in interbank fund transfers.

 

About usEmpirica is a trading software company focused on developing the potential that cryptocurrencies bring to financial markets. Empirica is offering solutions such as Cryptocurrency Algorithmic Trading Software implemented by major institutional investors and crytpo market makerswealth management software framework, crypto trading bots and trading software development services for companies from capital and cryptocurrency markets.

 

However, in contrast to other digital currencies, the Ripple protocol is completely currency agnostic and users are not required to convert local currency into Ripple’s native currency (XRP or “ripples”). Additionally, rather than attempt to circumvent traditional financial institutions, Ripple relies on financial institutions to function as gateways into and out of the Ripple network, and market makers to provide liquidity for FX conversion by posting bids/asks for each currency pair. Ripple routes each transaction to the trader(s) with the best price in the network.

Thus, in the same transaction discussed above, the U.S. importer’s bank would directly plug into Ripple and initiate a USD to EUR transaction. Market makers will compete for the transaction by posting bid/ask for EUR/USD. Ripple will ensure the market maker posting the cheapest offer fulfills the transaction. This market maker will thus, buy USD from U.S. Bank and sell Euros to the EU Bank.

The illustrative example points to several potential advantages of using the Ripple Protocol for interbank transfers.

  • First, because, users are not required to convert to XRP in order to transact on the Protocol, the sender of the funds only needs to worry about one fee, which is the FX spread. This spread, moreover, is minimized given Ripple’s algorithm to route transactions to the lowest spread on the network.
  • Second, because Ripple is not intended to be directly customer interfacing, banks continue to control their customers’ experience. Thus, banks could ultimately decide how much of the cost savings to pass on to their customers.
  • Third, transactions on the Ripple network typically settle within a few seconds. This enables banks to grant their customers faster access to their funds, improving their overall customer experience, and improving working capital for businesses.
  • Fourth, since customers continue to interface directly with their bank to access Ripple, KYC/AML and compliance requirements around customer interaction are already in place and can largely remain the same

Key Features of the Protocol

Below are key features of Ripple protocol, which further highlight how it differs from other interbank transfer systems and digital currency protocols:

  1. Consensus: the Driver of Real-Time Settlement

The Ripple network is a shared public ledger administered collectively by a network of servers. This ledger tracks the accounts and balances of Ripple users. Within the Ripple Network, all transactions are authorized and settled through a process called consensus. This process entails a supermajority of Ripple servers mutually agreeing that a transaction within the network is valid before updating the ledger.

Ripple servers use public/private key cryptography to verify whether transactions are valid or not. Each transaction that gets submitted is signed with a unique digital signature, analogous to how people sign paper checks with a unique signature in traditional banking. Ripple servers mathematically verify that the correct signature appears – the signature of the owner of the funds – before including transactions in a new ledger.

Consensus must be reached among a supermajority of connected computers in order to make changes to the ledger. This is what is known as an atomic process – either a transaction is completely verified, or not.

This process is what enables the Ripple Network to offer users real-time settlement (typically between 3 to 6 seconds) and bypass the need of a central operator, which as explained above, circumvents layers of fees that financial institutions, business and/or consumer bear for traditional payments. In other words, the process of consensus is what enables fast, secure and decentralized settlement on the Ripple network. This distinguishes Ripple from other digital currency protocols, such as Bitcoin, which rely on a process called proof of work (i.e. mining) to validate transactions on the block chain. Unlike Bitcoin, Ripple does not rely on mining to reach consensus, so it does not consume the large amounts of energy that Bitcoin does, nor is the network’s security related to the amount of processing power devoted to it.

  1. Currency-Agnostic: a Key Differentiator from Other Digital Currencies

The Ripple protocol also has a native currency called XRP (sometimes pronounced “ripples”) that exists within the network. This is similar to other digital currency protocols, which enable the creation and distribution of a native digital currency. Like other currencies, XRP is known as a crypto currency, or a currency that is verifiable using mathematical properties. These crypto currencies are digital assets, which can be transferred within the network.

Unlike other digital currency protocols, however, Ripple provides users complete currency choice and does not require users to transact in XRP. Instead, XRP is there to provide two key functions: to prevent abuse of the system and to act as a bridge currency for market makers providing liquidity within the network (more on both of these features below). Thus, users can hold balances in one currency and transact in another currency without converting to XRPs in the process.

  1. FX In-Stream: Lowering the Cost of FX through Market Maker Competition

Cross currency payments have historically been an area with very healthy margins. The FX component of an international wire transfer can frequently bear a 2% – 4% fee to exchange even the most liquid G10 currencies. Retail remittance pricing is even higher, often at a 5% -10% spread to institutional foreign exchange market pricing.

Ripple has the potential to meaningfully bring down these costs by making payment FX rates competitive on a per transaction basis.

The Ripple network translates currencies by routing orders through market makers competing to earn bid/ask spread. These markets makers are important sources of liquidity within the network and are primarily financial institutions with a business in currency or securities market making (i.e. banks, hedge funds, quantitative trading shops). Market makers compete for business within the Ripple network, posting orders to buy and sell different currency pairs to facilitate payments.

The Ripple Protocol is designed to route every transaction to the cheapest price available in the market. Thus, the only way an order gets filled is if it is posting the best price for a specific currency pair at the particular time the transaction is executed. As a result, the protocol can lower one of the highest financial and operational costs for financial services companies moving funds across national boundaries.

  1. Pathfinding Ripple’s Pathfinding Algorithm further improves on market maker pricing by searching for the cheapest path for payments to move across the network.

In liquid currency crosses, the cheapest path will often be a direct “one hop” path through one market maker, for example directly from USD to EUR. However, the Ripple pathfinding feature will seek the cheapest path even if it is a more complex route through several intermediary currencies.

In the example below, the sender of a payment holds EUR, and the recipient wants to be paid in KRW. Since there may not be a tight market in EUR/KRW, the payment is routed through several order books to improve the price. Unlike in traditional markets, users are not exposed to legging risk. Ripple executes multi-hop paths as a single atomic transaction. The entire transaction either completes or it never happens – there is no way for a payment to get “stuck” en route. Since Ripple transactions are just updates to a distributed ledger, multiple legs can be executed at the same instant as they are all included in the same ledger update. There is no counterparty risk to intermediaries.

Ripple Currency (XRP): Overview

The Ripple protocol has a native currency called XRP (sometimes referred to as “ripples”), which performs several key functions within the network. XRP, like other digital currencies, is a math-based currency (also known as cryptocurrency), which is a digital asset with verifiable mathematical properties. As a digital asset, ownership of XRP can be directly transferred peer-to-peer.

Just like bitcoin exists natively on the blockchain, XRP exists natively on the Ripple network as a counterparty-free currency. Unlike the Bitcoin Protocol, however, Ripple users can opt not to use XRP as a medium of exchange. Instead, XRP performs two key functions within the network: protect the network from abuse and provide a bridge currency for market makers. More on these functions below.

XRP: Protecting Against Network Abuse

Since the Ripple network is based around a shared ledger of accounts, a malicious attacker could create large amounts of “ledger spam” (i.e. fake accounts) and transaction spam (i.e. fake transactions) in an attempt to overload the network. This is commonly known as a denial-of-service (DoS) attack. In a DoS attack, perpetrators attempt to overwhelm a server with so many communication requests that the server is unable to respond to legitimate requests.

XRP’s primary function is to provide a layer of security within the network to protect against these types of attacks.

To protect the network from abusive creation of excess ledger entries, each Ripple account is required to have a small reserve of XRP to create ledger entries. This reserve requirement is 20 XRP (or about $0.12 at the time of writing). This requirement is intended to be a negligible amount for normal users while preventing a potential attacker from amassing a large number of fraudulent accounts to “spam” the network.

As a second line of defense, with each transaction that is processed, 0.00001 XRP is destroyed (roughly $0.000000055 at the time of writing). This is not a fee that is collected by anyone – the XRP is destroyed and ceases to exist. This transaction fee is also designed to be negligible for users. But when the network is under heavy load, such as when it is attacked, this fee rapidly rises.

The goal of this design is to quickly bankrupt attackers and keep the network functioning smoothly. Attacking the Ripple network can get very expensive, very quickly, but for regular users, the cost effectively remains “free.” In this context, XRP can be thought of as a postage stamp for transactions. If the price of XRP were to appreciate significantly to the point where sending transactions becomes a nonnegligible cost for normal users, there is a mechanism in place to lower (or raise) transaction fees by a supermajority vote of server operators.

XRP: A Bridge

Currency for Liquidity XRP can also serve as an ideal bridge for illiquid currency pairs. In theory, users of the Ripple Network could exchange anything of value. This could include fiat currencies, digital currencies, gold and even items like loyalty points, airline miles, or securities.

On a protocol level, Ripple makes a distinction between both the balance type (USD, EUR, XAU) and the issuing counterparty (Bank A, Bank B, etc.). This is important because USD balances issued by two different banks are technically liabilities of different institutions and have different counterparty risk profiles. From the perspective of the protocol, they are different financial instruments. As the number of assets and the number of counterparties in the network grows, the number of currency pairs can quickly become unmanageable for a market maker.

Instead of quoting every possible currency/gateway combination, XRP can serve as a useful bridging tool for market makers. If every currency is liquid to XRP, it is also liquid to other currencies.

Thus, while Ripple users have complete currency choice – meaning they can hold balances in one currency (such as USD) but transact in any other (such as JPY) – the market makers facilitating those transactions may see holding XRP as an ideal bridge currency.

The role of a “bridge currency” or “vehicle currency” is traditionally played by USD in financial markets. Within the Ripple network, there is a functional reason to prefer XRP. Because XRP is a natively digital asset (as opposed to a balance/liability), it is the only instrument within Ripple that has no counterparty risk, so it can be universally exchanged between market makers with no friction. Also, because it has no counterparty, XRP never has third party fees attached to it.

Ripple Labs believes that an increase in the number of counterparties and asset types in the network adds to the utility of XRP and creates demand for XRP in the long run.

 

 

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The Importance of Agile Software Development

The strategic value of software to companies continues to grow and businesses are increasingly seeking to software as the technology empowering and differentiating their businesses and products. Software is driving many of today’s key technology trends, such as cloud computing, freedom and social networking. Software embedded in goods can also be currently transforming numerous commercial businesses, such as the manufacturing, healthcare and communications industries. Organizations are challenged to create their business applications and software-driven merchandise faster. Compete, to successfully innovate and grow, organizations require experience and solutions to accommodate to competitive dynamics and customer needs.

Read more on how Empirica delivers its crypto software development services

 

Businesses utilize manual procedures and unsophisticated tools, including paper-based tactics and spreadsheets, to manage workflow throughout the software development lifecycle. These techniques are generally more suitable for smaller development projects handled by a team and cannot scale to meet the requirements of businesses and multi-team projects. The waterfall method gained prominence as the way to manage large software development projects. This strategy, which may take many months or years to complete, relies on rigid sequential execution of the many phases of the software development lifecycle, including analysis, design, coding, integration and testing that is final. Enterprises employing the waterfall method frequently structure internal branches around every development stage and utilize distinct legacy software tools for every phase and department, leading to siloed and disparate information, limited transparency and collaboration between teams, and increased risk of misalignment between software development and company initiatives. The next diagram illustrates the waterfall procedure:

 

Agile was introduced by a group of software visionaries in 2001 via a open letter. It represented a methodology for software creation and delivery designed to decrease costs and significantly improve quality, time-to-market and client satisfaction. Agile projects build software

 

Incrementally, in tiny batches, using iterations of one to four weeks which help keep development aligned with changing business needs. Agile is increasingly replacing waterfall processes across several industries because of the results it can provide. According to the Standish Group, software applications developed with Agile techniques have three times the success rate of applications developed using the waterfall process. The Standish Group defines an effective project as you delivered with functions and all the features, on budget, and on time. The following diagram illustrates the Agile methodology:

 

Agile techniques are being adopted by enterprises, replacing and disrupting the legacy software development methods that have comprised the market for application lifecycle software. According to IDC, the application lifecycle marketplace is comprised of this software configuration management, IT project and portfolio management, and automated software quality markets. In aggregate, IDC estimated these markets would reach $5.2 billion in 2012. Though these markets have been addressed by solutions supporting waterfall and other legacy methods of software development, we think that a transition to alternatives behind software development methodologies like Agile is ongoing. Our cloud-based platform of management alternatives is designed to address these markets and facilitate the adoption of Agile practices by businesses.

 

Furthermore, cloud-based alternatives have a small, but fast growing share of the total application development and installation market, which includes Agile management alternatives.

 

Organizations that develop business applications and software-related products face a range of business challenges. These are usually directly attributable to legacy software development methods. These challenges include:

 

  • Shortening time-to-market and increasing customer expectations. Competition for customers’ attention continues to intensify and, as a result, the importance of being first to market has significantly improved. With the proliferation of always-connected clients and mobile devices, Additionally, product reviews may be continuous and instantaneous. It becomes paramount that characteristics a product’s quality and consumer experience match or exceed customer expectations at launch, as poor client experiences can be readily shared. Customers’ demand for the speed and quality has set increased focus and pressure on how organizations handle the software development lifecycle.

 

  • Limited transparency into big development projects. Comprehensively monitoring the improvement of multi-team development projects and actively monitoring their priorities are challenges. These challenges are exacerbated when projects are big and teams are globally distributed. For projects with priorities and continuously-evolving demands, the ability to keep visibility into quality and progress is more challenging. Organizations who utilize legacy software management offerings may have separate applications for each role and phase of the development lifecycle. These organizations struggle with , out-of-date status info that is siloed and have limited into the work in advance. The ability to effectively adapt, optimize decisions and allocate resources necessitates a view of their software development process together with all teams.

 

  • For large-scale development projects, feedback and collaboration among developers, industry leaders and clients can be hard to coordinate. Collaboration must be continuous and the software development strategy has to allow for adaptation, since the comprehension of customer needs or business needs evolve.

 

  • Difficult transition to alternative development approaches and solutions. Approaches and tools used for managing the software development lifecycle frequently reflect. Because of this, there is a resistance to change, even if change can be demonstrated to boost time-to-market, productivity or software quality. Generally, legacy software management tools do not support the cycles utilised in Agile development. These applications are non-intuitive usually stiff, costly and, requiring implementations, increasing the challenge to some development business or attempting adjustments to its own processes.

 

  • Inflexible offerings. Conventional offerings for and approaches to managing the software development lifecycle can be hard to use or may lack the flexibility required to accommodate changing or varying goals and organizational needs. In addition to this downside, legacy offerings might require substantial resources and time to execute and can often be expensive. Further, after these offerings have been installed, updating, extending or adding new performance often necessitates bespoke development efforts which are time consuming and costly.

Read more on how Empirica delivers its crypto software development services

About us

Empirica is a trading software company focused on developing the potential that cryptocurrencies bring to financial markets. Empirica is offering solutions such as Algo Trading Software used by professional cryptocurrency investors and market makersrobo advisory systemcrypto trading bots and cryptocurrency exchange software development services .

 

 

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Liquidity, the greatest challenge for crypto exchanges

There is a general consensus that liquidity is the most important factor for all tradable markets. The ability or lack thereof, of a market to allow assets to be bought and sold at stable prices, is a major issue associated with cryptocurrencies. 

According to a recent Encrybit report, one in every three investors is worried about the problem of liquidity on crypto exchanges.

 

The importance of the liquidity problem requires tools and methods to manage markets liquidity. This document proposes an approach to monitor and manage liquidity. Monitoring is intended for the exchange management to understand their platform’s current liquidity level and how to improve it. Liquidity management starts with the exchange engaging professional market makers or using proper tools to take care of  liquidity. Last but not least exchanges should track the market impact of trades of different sizes, and oblige their market makers to fulfil certain conditions.

 

Empirica brings experience, tools, know-how and best practices in the area of technology for liquidity analytics and liquidity provision from capital markets to digital assets. We have been active in the market since 2011, working with stock exchanges and market makers with a track record on automated liquidity provision and measurement. 

 

How can an exchange manage its liquidity

 

Both for those who are just launching a new exchange or who have been operating an exchange for some time already, it is crucial to monitor liquidity metrics of all markets.

 

Read more about our tool for monitoring crypto exchange quality – Liquidity Analytics Dashboard

 

As in any tradable market, liquidity is provided by market makers, who mostly use automated market making algorithms. However, crypto exchanges have an alternative to the external market makers, as they are able to take this crucial aspect of exchange – the provision of liquidity – into their own hands.

 

Regardless of whether they use external market makers or an internal market making desk, crypto exchanges should outline to the liquidity providing party certain conditions pertaining to how the liquidity is provided and then constantly monitor the execution of these obligations. 

 

With proper tools, exchanges are able to track liquidity metrics and are able to react accordingly if agreed conditions are not met. Analytic tools also allow exchanges to compare liquidity in their markets to other crypto exchanges.

 

Monitoring liquidity

 

When executing a transaction, most investors only consider explicit transaction costs (taxes, commissions, fees). But that is only a part of the total cost. The larger the trade, the more dominant the part of the cost taken over by implicit costs.

 

Total transaction costs = Explicit transaction costs + Implicit transaction costs

 

One of the most important implicit costs to consider is market impact, also referred to as slippage. Market impact is a result of the price slipping down or edging up when you trade an asset. As the investor can not execute the entire order at the best offer, the trade is moved down the order book.

 

Exchanges, which want to attract not only small but also bigger investors, should monitor market impact and other important liquidity metrics in all of their markets.

 

Liquidity provision

 

To increase liquidity, crypto exchanges use market making services from external parties. This is a standard practice in any financial market.

 

Market makers

 

A market maker is a company or individual that regularly buys and sells financial assets at a publicly quoted price to provide liquidity to the markets. Their role is to satisfy market demand.

 

Crypto exchanges need market makers. If liquidity is low on a venue, exchanges usually try to attract market makers by the following methods:

  • Decreasing maker trading fees
  • Sharing profit from taker fees
  • Paying market makers for their activity

 

It’s  a “chicken or egg” problem. New exchanges and exchanges with low liquidity need market makers to attract other investors. The market makers, however, do not want to enter illiquid markets as there is not much volume to be made from takers and there is also additional business risk involved. Hence many illiquid exchanges need to pay market makers for their services. 

 

While working with crypto exchanges we often hear multiple reasons as to why crypto exchanges are not happy with their market makers. The main problems include:

  • Market makers choosing to support trading pairs that are most liquid; they are not interested in making markets on less liquid pairs
  • Spreads maintained by market makers are too wide
  • Market makers come and go in the markets that they promise to take care of, so exchanges would like to have tools tracking the activity of their liquidity providers
  • Market makers do not keep the order sizes as promised

Liquidity provision tools for crypto exchanges

 

Crypto exchanges have an alternative to market makers, or a complementary approach. They are able to run an automated market making desk themselves. In order to do that, though, they need funds, proper liquidity provision algos and a trader to monitor them.

 

Market making requires a good combination of technology and some trading skills. The algos must be low-latency and capable of scaling to thousands of orders per second, on numerous trading pairs. It needs a disciplined approach to trading and risk management. 

 

There are many market making tools on the market. They range from simple black-box bots to sophisticated algorithmic engines with market making capabilities.

 

When searching for self liquidity provision tools one should be considering the following criteria:

 

  • Reliability

 

Market making algorithms should work 24/7, and be able to recover from unexpected situations like connection problems with an exchange.

 

  • Security

 

Market making systems have  access to the funds of the exchange, so it is important to choose from proven solutions.

 

  • Transparency

 

In the case of black-box algorithms, the bot developers should be widely known in the community. Exchanges should consider skipping bots and going for proven institutional-grade market making solutions available on the market.

 

  • Parametrization

 

In the case of algorithmic market making it is good practice to choose solutions that enable parametrization and tuning up of execution according to the current market situation.

  • Access to source code and custom changes

Ideally crypto exchanges should have an option to take over the market making algorithms source code and let their team develop and tune it further. Very often exchanges might want to add secret sauce to the algorithms that will create their competitive advantage in the market. 

 

Read more about our tool for market making strategies for crypto exchanges  – Liquidity Engine

 

Competing with other exchanges is a challenge today. In July 2019 services like CoinMarketCap or coinpaprika listed about 260 exchanges. However, Empirica’s internal research shows that there are currently more than 600 crypto exchanges in various stages of maturity, and further new exchanges being launched every month. Every exchange is trying to attract new investors, but it is clear that at some point only those exchanges with the best liquidity will survive. That is why crypto venues should not only manage their own liquidity but also observe the liquidity level of their competition, and identify inefficiencies that can be addressed.

 

About us

Empirica is a trading software company that specializes in liquidity measurement and liquidity provision software that can help exchanges manage their liquidity. Empirica is offering solutions such as Algorithmic Trading Platform used by professional cryptocurrency investors, crypto market makersrobo advisory systemcrypto trading bots and cryptocurrency exchange software development services.

 

 

Schedule your appointment right now to learn more

A brief guide to Litecoin

What is Litecoin and how does this differ from Bitcoin?

Since Bitcoin was established in 2009, many other blockchain assets are released with modified versions of Bitcoin’s code, with varying levels of success. Litecoin is one such altered variant and was launched in 2011, with the most important aim of earning transactions faster. This is also one of the main differences versus Bitcoin. Litecoin is currently the seventh largest cryptocurrency in terms of market capitalization.

The motivation behind its formation was to improve upon Bitcoin connected to the volume and speed of transactions. While practically speaking, Litecoin and Bitcoin work in precisely the exact same style, Litecoin differs from Bitcoin in aspects such as quicker block generation rate and use of a different type of algorithm called scrypt. The block creation is four times as fast on Litecoin, which means faster transaction times, making Litecoin more appropriate to handling obligations. What’s more, Litecoin is significantly more efficient in terms of energy consumption in the mining process and ordinary consumer grade house computers may handle the mining.

As Litecoin retains the deflationary feature of Bitcoin by placing a limitation on the maximum amount of coins that will ever be generated (84 million), it’s often known as the ‘digital silver’ into Bitcoin’s ‘digital gold’.

Popularity, with the cost increasing fivefold in only three days into an intraday high of USD 48, as the early adopter crypto community started to look for alternatives to investing in Bitcoin. Favorable evaluation comparisons were printed with Litecoin before trading at approximately USD 3-4. The steep and surprising rally was followed by an equally steep.

Litecoin found new prominence when it became the biggest Blockchain advantage up to that point to implement a new technology that divides a number of their transaction data in the block and allows more transactions to be set on the same block. But Litecoin stole the march on Bitcoin as it proposed the implemention of this SegWit solution, and from March, it accumulated considerable support from the Litecoin community.

Because of this, Litecoin strongly outperformed Bitcoin involving when Bitcoin also progressed towards implementing the SegWit solution, the Litecoin rally stalled. Since Bitcoin continued to rally, Litecoin has lost about half of its value relative to Bitcoin at a month.

A much more directly related competitor in the kind of the recently created Bitcoin Cash. Both have features designed to make transactions quicker and easier, and to allow these cryptocurrencies to act as payment mechanisms and achieve wide adoption.
There are several reasons in favor of the two crypto assets. Though Bitcoin Cash has the benefit of a larger block size, entire, Litecoin appears to be farther advanced in implementing alternatives to improve transaction speed. Including testing the lightning network, an instantaneous and very affordable layer for processing trades including microtransactions off the blockchain.

There’s also a valuation argument in favor of Litecoin, as the market capitalization of this newly created Bitcoin Cash is roughly twice that of Litecoin, while Litecoin is currently accepted as payment and used by many companies.

On the other hand, the name recognition of ‘Bitcoin’ along with the Long history of the first code may signify that ultimately, more will embrace Bitcoin Cash.

About us

Empirica is a trading software company focused on developing the potential that cryptocurrencies bring to financial markets. Empirica is offering solutions such as Algo Trading Platform used by professional cryptocurrency investors, crypto market makersrobo advisory softwarecrypto trading bots and trading software development services for companies from capital and cryptocurrency markets.

 

 

Schedule your appointment right now to learn more

A brief guide to cryptocurrency exchanges

With a rapidly growing interest among technologist as well as trader towards cryptocurrencies, we have been writing a series of posts about them. In this post we will be covering cryptocurrency exchanges and point out their characteristics, and hopefully at the end of this post you may get an idea on which crypotocurrency exchange to do your trades.

Generally there are many doubts and question marks around how reliable cryptocurrency exchanges are. There has been a lot of rumors and news also around governments getting involved and closing down cryptocurrency exchanges, we heard that in South Korea  the governments is going to raid the cryptocurrency exchanges operating in the country and shut them down. If you are curious about that story, one of the officials from the government called that an “unrealistic move”. nevertheless in recent times we have heard numerous speculations about cryptocurrency world which never came to life.

The purpose of this post is to assess the most known and used cryptocurrency exchanges. We have chosen arguably the top rated exchanges, basing on fees applied, how safe the exchange is, if liquidity in the exchange is high or not, the possible pairs and currencies to trade with  USD, Euros or crypto with crypto and so on. The list we have gathered is narrowed with qualities indicated above.

Coinbase

Coinbase is one the most known and used exchange for Cryptocurrencies with up to 10 million users. Coinbase was founded in 2012 and is California based Crypto exchange for cryptocurrencies like Bitcoin, Ethereum, Litcoin, Ripple and etc. After introducing GDAX, Coinbase also aimed more sophisticated traders with a more powerful tool. Coinbase is also available for mobile users. Fees charged are around 0.25%.

Read here more on our coinbase market making bot and coinbase trading bot.

Bitfinex

Bitfinex is a Hong Kong based cryptocurrency exchange, specialized for trading Bitcoin and Altcoins. About fees, Bitfinex does have very low fees of 0.2% and for those who instead place trades in the order book will pay only 0.1%. Bitfinex is also available for traders to trade using mobile app. Bitfinex offers a variety of order types. For automating the trades Bitfinex also has provided an API feature for third-party softwares to integrate.

Coinmama

Coinmama is a well-known, Israeli based Bitcoin exchanges which traders could purchase Bitcoin using creadit/debit cards. The fees in Coinmama are about 6%, relatively high among other exchanges. Though Coinmama does not require traders to provide or upload their know your customer (KYC) documents.

Kraken

Kraken known as one of the largest Bitcoin exchanges. Kraken’s users can trade Bitcoin using Canadian dollars, US dollars, British Pounds and Japanese yen. Kraken is in Euro volume and liquidity. Kraken was founded in 211 by Jesse Powel, Kraken is also known for low transaction fees ranging from 0% to 0.26% depending on the account tier and the type of the transaction(buy/sell).

Gemini

Gemini is a US based exchange mainly focused on Bitcoin, US dollars and Ethereum. Gemini was founded in 2015 by Winklevoss twins (same brothers who claimed Mark Zuckerberg stole the idea of Facebook from them). Gemini’s users can deposit Bitcoin, Ether and make bank and wire transfer free of charge. In regard to trading fee, Gemini set to charge 0.25% for sellers and buyers. Gemini is referred to as the safest cryptocurrency exchange out there.

More on cryptocurrency exchanges:

Exchange

 

Estimated traffic

 

users

 

Fees

 

Tokens traded

 

Coinbase

 

109M

 

10.1M

 

0.25%

 

Bitcoin, Litecoin, Ethereum, Bitcoin Cash, Ethereum Classic

 

Bitterex

 

85M

 

5.6M

 

0.25%

 

Bitcon, Ubiq, Litecoin, Blackcoin, Dash, Ethereum, Gambit, Gridcoin

 

Bitfinex

 

 

36.5M

 

2.9M

 

0.20% Bitcoin, Ethereum, Ripple, Litecoin, Bitcoin Cash, EOS, NEO, Iota, Ethereum Classic, Monero, Dash, Zcash, OmiseGO and more
Kraken

 

22.6M

 

2.9M

 

0 to 0.26%

 

Bitcoin, Ethereum, Litecoin, Gnosis, EOS, Dogecoin, Tether, Melon, Zcash, Augur tokens, Iconomi, Stellar, Ethereum classic, Ripple, Monero, Dash

 

Okex

 

 

3.5M

 

350K

 

0.20% to 0.25% CommerceBlock, Revain, Bitcoin, Chatcoin, Gifto, Zipper, Ethereum, Zencash and more
Gdax

 

46M

 

4.5M

 

0.25%

 

Bitcoin, Bitcoin Cash, Litecoin, Ethereum
CEX

 

10.8M

 

1.6m

 

3.9%

 

Bitcoin, Ethereum, Bitcoin Cash, Litcoin
Gemini

 

3.4M

 

111K

 

0.25%

 

Bitcoin, Ethereum
Coinmama

 

999K

 

33.4K

 

6%

 

Bitcoin, Ethereum

About empirica

We are trading software company focused on developing the potential that cryptocurrencies bring to financial markets. Empirica is offering solutions such as Algorithmic Trading System used by professional investors, tools for cryptocurrency liquidity, robo advisory software, crypto trading bots and trading software development services for companies from capital and cryptocurrency markets.

 

 

Schedule your appointment right now to learn more