Excerpt from Building and Deploying Crypto Trading Bots with Rails and Go
In the simplest sense, digital assets are virtual property that someone can claim ownership over. Since the emergence of internet connected video games, marketplaces, and social networks we have been creating and consuming digital assets in many forms such as movies, in-game items, and music. While digital assets have become a ubiquitous part of modern life, they have been generally confined to a narrow scope of use (i.e. limited ability to value, trade, rent, sell or use in income generating activity on an open market). However, with the emergence of cryptocurrency as a new digital asset technology the scope of what a digital asset is and can be used for has expanded — and along with it, a completely new market for traders to engage in.
Cryptocurrency, at its base, is a digital asset designed to work as a medium of exchange, like traditional currency, that uses cryptographic signatures to secure financial transactions, control the creation of additional units, and verify the transfer of assets. (Wikipedia). Practically and technically speaking, the first and most widely known cryptocurrency is Bitcoin, a digital coin which is not owned by a central figure and can be transacted with anywhere in the world. Bitcoin and its counterparts are commonly thought of as a new asset class, but, unlike traditional equities, bonds, or commodity futures, can be traded 24 hours a day, 7 days a week, all year round. This has made it a very desirable asset to trade in an automated fashion since inception.
Exchanges and Trading
The open nature of cryptocurrencies combined with modern know-how of building consumer internet technology has resulted in an explosion of easy to access and use exchanges. The top exchanges today include Coinbase Pro, Bitfinex, Poloniex, Gemini, Bittrex and Binance. Such exchanges lack the technical debt incurred from decades of exploration and operation. The result of which is API accessibility, high programmability and low barrier to entry from day one. Furthermore, the nascency of these markets means less competition from traditional electronic traders. All of this, to surmise, makes cryptocurrency a primary target for trading with our automated trading bots.