Platforms that collect information about Price comparison crypto currency exchange are like a black box, because no one knows how to calculate their average price. However, there is enough information available to find out that they are doing this incorrectly.It is really frustrating that the digital currency movement relies on completely vague pricing information. How can a decision be made based on uncertain black box information? The development of the Silicoin for Price comparison crypto currency exchange began two year ago. During this years, the Silicon team was able to solve many technical problems and issues, and now they are trying to share their findings with us. These findings include:

1-Digital currency price collection platforms put trading pairs from all exchanges in one basket to calculate the average price. This approach disrupts prices. We must first find the price of coins in each exchange and then calculate the average price

  1. There are many ways to find the dollar price of coins that are not traded directly in dollars. Most of these methods are inappropriate. We explain the options available and explain why step-by-step pricing is the best option.

Ambiguous issues and problems of Kevin Market Cap method

At first glance, the Kevin Market Cap method seems simple:

Step 1: Receiving information of all pairs of trading currencies from exchange offices and apply algorithm to check and clear information

Step 2: Collecting all the currency pairs and get the price and trading volume of each currency pair

Step 3: Calculate trading volume using the average price of coins across trading pairs

The method of the second step is as follows:

The price of each currency pair is calculated at the non-converted price reported by the exchange and then converted using the Kevin Market Capp reference prices.

Why is it wrong to collect information about Price comparison crypto currency exchange in one category?

As mentioned, Kevin Market cap collects trading pairs from all exchanges and calculates the average of all of them, regardless of which exchange the pair belongs to. From the methods of other providers that collect Price comparison crypto currency exchange, it can be seen that they also collect pairs of trading currencies. The method of collecting currency pairs has many disadvantages and the result is incorrect prices. An alternative way to collect all pairs of trading currencies in one batch is to group them by each exchange. Each coin traded at an exchange must receive a separate price.

Correct: The price of Bitcoin in a Bainance exchange is $ 4,000.

 

Incorrect: In Bainance Exchange, the value of the BTC / USD currency pair is equal to $ 3990 and the value of the ETH / BTC currency pair is equal to $ 4010.

One theory: If there is no fee, there will be no arbitrage opportunities. This means that assets are priced the same across the market.There is a huge fee when transferring capital from one exchange to another. So it makes sense to calculate the average price of digital currencies in all exchanges.In contrast, the transfer of capital in an exchange has a small fee. Therefore, if we consider a currency pair trading with several coins in a specific exchange, the price of this currency should be the same.

How to calculate the reference prices by Kevin Market Cap?

When collecting all currency pairs, reference prices are very important inputs because they have a huge impact on the Price comparison crypto currency exchange.Although we have stated that collecting information in one category is wrong, we now turn to how to calculate reference prices. This will help us better understand the complexities of digital currency pricing.

 

Step 1: First, we calculate the trading volume using the average dollar price of Bitcoin across the pair of Bitcoin trading currencies with traditional currencies

Step 2: Calculate the dollar prices of the currency pairs traded with Bitcoin or traditional currencies (Bitcoin / Coin or Traditional Currency / Coin). The price of Bitcoin is the reference price. Then, using the average price of these coins, we calculate the trading volume.

 

Step 3: Calculate the dollar price of coins that have a trading pair with the coins priced in the second step.

Step 4: Follow the steps above to get the price of all digital currencies.

Leave a comment