If I am honest I've been procrastinating all week in regard to this article. Though, I'll admit my knee-jerk reaction to a new writing competition was excitement.
I've always enjoyed these writing competitions, not only because they offer solid prizes, but because it challenges you as a writer to get out of your comfort zone and write about something they you perhaps weren't intended to. It makes you do a little legwork, learn a little more about a project or product and is quite satisfying when completed (irrespective of how the results go). However, as I said at the beginning, I've been procrastinating. You may be wondering why, well in truth I knew nothing of Bityard...nothing...nada...zilch... But I've been here before, right? So why the worry? Well the thing is, right after my all to eager response (above), I went away to find out more and this is where I saw my kryptonite...
I've said it before and I'll say it again, I'm not a trader. I've been burned, only a little thankfully, by trying my hand (inexpertly) at trading. Because of the nature of the products that Bityard offers I don't believe I am best placed to rate/recommend or even review them. However, I've never been a 'give up' kind of person, so I figured it is better to take a different route with this article, instead this will be more of a journey of discovery, the goal being to just try and wrap my heard around what Bityard does and where it sits in the crypto-ecosystem. If you're willing to come along that journey with me I'd be glad of the company, especially while I'm out of my depth!
Baby Steps (the 5 W's)
Whenever I am trying to understand something I tend to use a trick I picked up on a 'effective email communication' course at work, the 5 W's (Who, What, When, Where, Why). The point of this exercise is to drill down to the bear minimum, 1/2 sentences for each thing, no overwhelming essay text, something that can be digested in a couple of mins. With that in mind let's see how it goes.
Who are Bityard?
Bityard is a privately held cryptocurrency contracts exchange.
What is Bityard?
Bityard as an exchange allows users to buy/sell (using USDT) complex trading contracts. Meaning it is not like a normal exchange where we spot trade for specific pairs.
When did Bityard come onto the Scene?
Bityard launched in November 2019. Also it is noted in one of the articles that Bityard was linked heavily with Binance in the yearly days (though I've been struggling to find further evidence of this).
Where are Bityard located?
Headquarters are located in Singapore. However, it is worth noting that they have also been "regulated and licensed under the Singapore’s ACRA, USA’s MSB from Financial Crimes Enforcement Network which belongs to United States Department of the Treasury, Estonia’s MTR". None of which are requirement for a crypto exchange I believe.
Bityard gives users an easy to use interface, low trading fees (0.05%) and allows for from 5x to 200x leverage to potentially increase. Prices are real-time weighted average from Binance (30%), OKEx (40%) and Huobi (30%) and there is no spread/slippage.
So what does this mean? Well it tells us that Bityard is a relatively young company that has gone to substantial lengths (by adhering regulations) to assure customers of the security and build trust in their platform. The Products they offer appear to aimed toward experienced crypto-market traders, though with a focus on 'easy-to-use'.
Deeper Dive (Complex Contracts)
So if like me you're already lost at the "contracts exchange" then that is fine, I think it is to be expected. For those who work in the financial industry this all sounds pretty straight forward I think. However, for the rest of us perhaps it is good I think to look at what is meant by complex contracts. For that let's cover a couple of key terms (source: Investopedia/Bityard):
So what does this mean? This means that traders are able to put in a smaller amount of their own capital (enough to cover possible losses) to borrow considerably more and leverage that borrowing, though at higher risk, with the potential being much higher returns should the trading strategy be successful. The trading itself is not in tokens or coins, instead it is contracts which from my understanding (albeit limited) are reflective of how the trader believe the price in the market will change. This last bit is a little fuzzy for me currently but Bityard actually sum it up nicely in their own FAQ information.
Demos and Copy Cats
So if you're looking at the idea of effectively taking out loans (collateralized with a small amount of your capital) and thinking to yourself that is one hell of a risk, then you're not wrong. In the right hands (of a seasoned trader) I can imagine that you could make a killing. However, the flipside is you could go broke. As a result, it seems the team over at Bityard have attempted to secure an on ramp for newer traders. This comes in the form of a demo site and the ability to copy prominent traders.
Once signed up to an account traders have access to be able to demo trade. This means that if a beginner is wanting to run through the basics or you are just needing to acclimatize yourself with the trading process then it can be done without risking capital. Indeed, they even appear (as above) to incentive users to complete a basic demo trade at first to easy folks into the swing of things.
The next functionality (added back in November I believe) that appears to be aimed squarely at beginners is the ability to follow and copy traders from another trader. It is incentivized for the trader being followed as they get a portion of the profits and for the follower it means that you don't need to watch the markets. The key thing here, as I understand it, is to make sure to select a trader to follow that aligns with your own risk strategy and remember that even the best traders make bad calls sometimes.
So I feel like I've really only just scratched the surface for this topic and I'll be honest it scares me a little. I really like that there has been a focus by Bityard to make complex contracts like this more approachable to the beginners. However, I also wonder if that itself has some serious potential to do harm, because it has the possible effect of putting a wolf in sheep's clothing. Still I feel like there are a whole world of experienced traders out there that would look at a product like this and appreciate that it makes their life easier as well.
Before I started writing this I thought to myself maybe I should have a go and create an account. In reality though I think it is important to know when I am beaten. That said it has been interesting to learn just a little more about how advanced traders wrack up the big bucks. If you're a trader and know what you're about then I don't doubt that Bityard is the place for you, for now I'll stick to my spot trading and earn my fortune slow and steady with interest earning or staking.
Thanks for reading, hopefully your brain isn't in too much pain after this one. If anyone reading this spots issues with my understanding please let me know, I'd much prefer to be corrected than to go on blissful unaware of my mistakes. Stay safe out there y'all.