Spread the love
Clear all

Understanding the Role of Cryptocurrency Brokers in the Digital Asset Market

4 Posts
1 Users
Member Admin
Joined: 7 months ago
Posts: 686
Topic starter  


The advent of cryptocurrencies has revolutionized the financial landscape, introducing a new realm of digital assets. Central to this transformation are cryptocurrency brokers, who facilitate transactions and trading in this dynamic market. This article delves into their roles, regulatory environment, client interactions, and compensation models.

1. The Evolving Regulatory Landscape for Cryptocurrency Brokers Cryptocurrency brokers, akin to brokers in traditional financial markets, are subject to regulatory oversight, though the specifics can vary significantly by jurisdiction. Key developments include:

  • Infrastructure Investment and Jobs Act: This U.S. legislation expanded the definition of a "broker" to encompass various actors in the cryptocurrency space, thereby broadening the scope of regulatory oversight.
  • IRS Regulations: Proposed IRS regulations aim to integrate digital assets into the existing reporting framework, mandating brokers to report transactions on new forms like 1099-DA. These regulations, slated for future implementation, are designed to enhance transparency and compliance in the sector.

2. The Broker's Role and Service Offering Cryptocurrency brokers serve as intermediaries between buyers and sellers in the digital asset market. They offer platforms where clients can easily trade cryptocurrencies, often providing additional services like:

  • Market Analysis: Brokers may offer insights and analysis on market trends.
  • Trading Advice: Some brokers provide personalized trading advice to clients.
  • Customer Support: Many brokers distinguish themselves through robust customer support services.

3. Interactions with Cryptocurrency Brokers Engaging with a cryptocurrency broker typically involves:

  • Placing Orders: Clients place buy or sell orders through the broker's platform.
  • Execution: The broker executes these orders, often on cryptocurrency exchanges.
  • Payment Methods: Brokers usually offer diverse payment methods, including traditional options like bank transfers and credit cards, enhancing accessibility for a wider range of investors.

4. Compensation and Fee Structures Brokers are compensated primarily through fees, which can vary based on the services provided:

  • Trading Fees: These are charged for each transaction and can vary based on trade volume.
  • Service Fees: Brokers may charge additional fees for services like account maintenance or withdrawals.

5. Comparison with Cryptocurrency Exchanges While both brokers and exchanges facilitate cryptocurrency trading, there are notable differences:

  • Fee Structure: Exchanges typically have lower trading fees but may lack the additional services offered by brokers.
  • User Experience: Brokers often provide a more user-friendly interface, catering to both novice and seasoned traders.

Conclusion Cryptocurrency brokers play a pivotal role in the digital asset market, offering platforms that bridge the gap between traditional finance and the burgeoning world of cryptocurrencies. As the regulatory landscape evolves, these brokers are poised to become even more integral to the market's infrastructure, providing services that enhance the trading experience for a diverse clientele.

Member Admin
Joined: 7 months ago
Posts: 686
Topic starter  

I am going to Cover this here for Everyone so they can Understand some Economics, for themselves or as Brokers. I will Start by mentioning Peter Schiff, this is not saying that he is Wrong, I just want Everyone to have References so that this can make sense to Everyone.


Peter Schiff has used the Term "Tulip Mania" to Describe Bitcoin, or Cryptocurrency in General (Everyone should know I NEVER Suggest just Buying Bitcoin, I Suggest Starting a Coin for Your Town, School, Team, Church, etc, then Buy Bitcoins to back it up like Gold or with the Earnings) and the Tulip Mania Concept is the same as the Housing Bubble so we can use these to understand Cryptocurrency which does have "Bubbles", Tulip Mania is a Bubble. And Peter Schiff could be considered Accurate in some ways, but Bitcoin does have more Intrinsic Value than the Tulips, and Peter Schiff knows this I am sure, but Tulip Mania is a Great Place to Start. I do Love the Comparison as a Starting Point. I have also Started using the Descriptions of Ponzi Schemes to Show that these are not Ponzi Schemes. I will go ahead and make all 3 Comparisons here.


Tulip Mania, that was when Certain Tulip Bulbs were SO RARE, because they were just then being Bred by Tulip Breeders for the First Time and there was Real Rarity, the Supply and Demand led the Prices to go up in ways that the Dutch (the Country that Ran the East India Trade Company) had Never Experienced before and now it is considered a kind of Economic Rule. Tulip Mania was about Tulips that were Rare for 3 Years, and then after 3 Years they were so Popular they were being Grown Everywhere and were no Longer Rare, and then we could call the Concept Haggling where once the Consumer of the Tulip knows that next Year that Strain will be Cheaper, they can Talk down the Price. And Eventually it all Leveled out.


That was Tulip Mania, when certain Strains of Tulip were so Rare there was Artificial Inflation on their Value. It wasn't because next Year there wouldn't be any and if you Buy them now you have them all to Sell to Everyone next Year, Next Year there would be even more made than Last Year. If anyone is Wondering what Peter Schiff knows about the Intrinsic Value of Bitcoin, it is that it is Rare. It has the Halving Events, so Every Few Years the Miners actually earn Less Bitcoin, so they Sell those Bitcoins they have for more, out of Fear that they will Run out. That is Real Rarity. And Peter Schiff is also maybe missing something, I think maybe he was there when I was, he might have seen a $5 and $30 Bitcoin, and he wonders "What Holds up the Price from going there again" and I think there were only like 2-3 Million of us there are that Time. Adding the Population of the Earth to the Bitcoin Buying Pool, changed it's Rarity. Because it is being Traded between so many People. The more People it has to be Shared between, the Less Everyone gets. And sorry for Focusing on Bitcoin Everyone, I usually would pick another Currency and I do not Suggest just Buying and Investing in Bitcoin as a 1 Generation Investment, do that as like Heirlooms like a 2 or 3 Generation Investment, don't Buy Bitcoin for you. Buying it as $5 was a Great Buy, I would never say that just because you missed the Price Spike that you should Buy in and Try to catch another one on Bitcoin in this Generation, even though it is almost Guaranteed, almost, that it will go up more in this Generation, Everything so far has all been 1 Generation. We haven't had a 2nd Generation during this. But I Suggest you make Your Own Coin. Use Bitcoin like Gold, use it to get Bank Certificates to back Projects, that is use it like Ethereum. ETH is basically "Gas" when you Start your ETH Project, when you get into ETH, Every Piece of ETH You Buy should be Considered Your Gas that you have to make Your App, dApp, Run. So then the ETH is not sitting there Hoping to gain Value (soon Proof-of-Stake ETH could make that Happen too though), it is an Investment like in Products to Sell. The ETH is the Project Financing, and Deliveries of Products, etc, the ETH is that Capital behind your Business. Use Bitcoin that way, and come out with more than you Started, that's how to use it. Day Traders are looking for something like Shibu Inu which has Dramatic 20% Swings, and they can Earn 20% Every Day. But that's Day Trading, you want to be even more Effective than them. Bringing in Your Own Customers and Everything.


So that Brings us to the Housing Bubble, which is like Tulip Mania, we will Start there. The Housing Bubble was like Tulip Mania, because the Banks were Approving Loans that People couldn't Afford, and Developers were being Told to Build Houses because it was a Very Lucrative Market. So there were Houses that were Livable that were being given to People on Loan, and more and more Houses were being made, which decreased the Value of the House they were Paying the Loan on. So, it is like if I Told you to Buy a Tulip that was Very Rare, or you came to me and said "I will Pay $1,000,000 for that Tulip" and Next Year, I make sure that there is 10,000X as many for Sale. I don't make 10,000 X $1,000,000 if I can't find 10,000 of you, I probably have to go to some People and give them Discounts, Sell them 1,000 so they can Sell and so give them wholesale Pricing, etc. The Bulb I Sold you is no Longer worth $1,000,000 you maybe need 50,000 Bulbs to make $1,000,000 the Next Year if you are going to Start Growing and Compete with me. That is what Happened with the Houses, they went Lower and Lower in Value, and even if you weren't Planning on Selling you were still Paying a Loan you Couldn't Afford. And so they started Foreclosing, that Word "Foreclosure" was heard Everywhere, this was when the Bank was taking People's Houses and sometime they would still Live there, or Homeless People would Break in, because the Bank couldn't Sell it, and the Bank was Offering like $25 a Month Mortgages and Things, Mortgages were much much Cheaper than Rent around 2010. In 2010 that was the Time to have Bought a Property to use as a Rental, because you could go Pick Up like 20 Houses and be Paying the same as someone that was Renting. Especially Rent now. So that is how Tulip Mania was like the Housing Bubble.


So the way Cryptocurrency is like the Housing Bubble is this, when there was 2-3 Million of us, there wasn't a Big Demand, there was MtGox and you had to Send them Money Through Western Union or Money Gram. When the 7 Billion People on Earth came in, there was more Demand than Supply. So the way I actually Diagrammed it was like a Wall and the Wall is Holding back Water like Water Pressure, and that was Simply all of us Owning Bitcoins Wanting to Sell them. And that Wall in Between the Water and the Dry Space had a Trickle, but the more we Opened up Sales Points, the more that Pressure of us all Wanting to Sell, would actually become a Rise in Value. It is almost Counter Intuitive, that the more we can Sell the Higher the Price goes, but once the Bitcoin on MtGox had to compete with another Exchange, now there were People Buying just to Sell to the Gap, which was a whole New Breed of Buyer, it wasn't Novel, it wasn't Investing, it was almost a Service to Sell to the Gap and have the Prices Match Across Markets. Then CoinMarketCap became a Website, and we could all see the Market Capitalization. And the Market Cap is maybe actually misleading because no one usually directly then goes and Talks about how many Bitcoins the Whales have that they aren't Selling. But this then also gets into "Bear Whale" which was a Person who had so many Bitcoins, he would just Sell any Time the Price got High, so he would get all the Good Money, and he would knock the Price Down. For maybe 3 Years he did this. I don't think that will Help anyone understand the Housing Bubble or Tulip Mania, so let's get to the Next Subject.


Now Ponzi Schemes. First I will Describe what one is, and how they Actually Work (for the People that get in First) for a Time before they Collapse, and then how to use the same Model and not have a Ponzi Scheme, how to Create a kind of Debt to each Other that you can use to Build Capital Together. You and People around you. So a Ponzi Scheme, that would be in Cryptocurrency Terms, if I go on Bitshares (BTS) OpenLedger (OL) and I make a User Issued Asset (UIA) or I go on TribalDEX and I make a Smart Media Token (SMT), or I go to ETH and I make an ERC20 (it would be an ERC20 unless they made a Crazy Tricky Ponzi to Trick you), or TRC20 on TRX Chain, if I went and made any of these Tokens, and I went around Town with Business Cards doing an Initial Coin Offering (ICO) I tell you "Buy my Coin for $0.05 each" or $1 each or whatever, and I Tell you "The Price will go up", that needs to be Supported by something. I can't just Sell Everyone Coins and say "It will go up, just don't Sell it for Less than $1" there is more to it than that. Having first that Value in the Holder's Head is not Bad, it is not Bad for someone to know that they aren't going to Sell their for Less than $1 and to Hold it until it is the Price they want to Sell it for. But that alone is not going to make the Price go up, you need the New People to come in also. But that doesn't Stop it from being a Ponzi Scheme, so now, my $1 Coin that I made Business Cards for, and maybe I Sold them to People on the Bus, or People who were Walking around Town, etc, I Sold all these $1 Coins to these People (this is a Hypothetical so that Everyone can see how it Works) and I tell all of them to give me their Emails or whatever, or we all Join a Telegram Channel together, or Text Each Other Updates and have a Group of Leaders that I choose from the Holders. And the Goal is "Get other People to Buy Your Coins for more than You Paid" that is a Ponzi Scheme if that is Your 1 Goal. It's not a Bad Goal to have Your Coin "Admins" or whatever you would Call them "Shilling" Your Coin as it is Called, Every Coin needs some Shills or no one would hear about them. But you are Telling those People that each Paid you $1 per Coin, to now go out and make more Money on those Coins themselves, this is a Ponzi Scheme. The Next Group, you tell them the same thing "You all Paid $2 each, find more People to pay $3 each" and Everyone would seem to be making Money, it would be Working as it would seem, Everyone might even be Happy with the Scenario, except those that just Paid $3 don't know. You don't Care anymore, you don't even make Money when the Others Sell Their's. So you Leave. That's how Ponzis usually go.


And the way to Avoid this is that you want something else to be there. Now, many want to Create the Coin and have Money come in like it did During the ICO Boom, when ERC20s were New. You want to Make a Token, Bring in Money, and then Create the Company, it's a Natural Desire to want to do it that way, but it's better to Start somewhere else. It is Better to Even just have a Facebook Group, or a Discord or Telegram Group, you Start there. If you don't have something that you can Advertise on a Page, and Pay Facebook for Ads for, you Probably don't need a Cryptocurrency Yet, the Cryptocurrency can come after your Brand. What I am Supporting mostly is that Tokens be used as like Rewards Programs, the TribalDEX Tokens Mirror the way STEEM, HIVE and BLURT Work so it is like a Well Managed Airdrop, a Proof-of-Stake (PoS) with the Factor of Daily Voting Pools being Distributed to the Vote (like a Facebook Like, "Vote" just means "Like" on those Platforms) Receivers. You would likely want to be on those Platforms Earning when you make Your Token also, so you can Talk about it there and Earn Other Currencies Talking about Your Currency. The Gist of this Paragraph being that making a Token that is ERC20 or otherwise not Mined, and Simply a Novel Token to Represent a Value to a Community, you would want to First Build that Community. Maybe the Best Example would be those Website where we would Play Games on the Computers in School, like NeoPets, and HomestarRunner, and then Website that had Games on it like the Line Rider Game, or like Castle Defender Games and Things, you would want some Website like this First. With Ad Revenue, and a kind of Community. Then the Token would be Advertised to them, and Financed by the Website. Not a Ponzi Scheme.


Now we can Talk about the Housing Bubble and PoS so Everyone can understand more about Crypto, this gets to what Happens with Bitcoin also, let's Try to understand that Term here "Artificial Inflation", which is Hard to Identify. I Cite Peter Schiff because he is actually a Very Good Economist, he is able to understand this all, he Probably would say I know what I am Talking about and that no one else Talks like me in Crypto, and no one does, they are all Morons mostly. They know Linux and Things, we can give them that, but they are not Street Smart or Book Smart. And I am a Leader, a God Amongst Men, so comparing to me is unfair, but there is Definitely something missing that I Provide. Even just Stateism. But I Digress, I chose Peter Schiff as the Reference because most People usually say he is a Fool, and then they all go Silent when his Predictions are Accurate. Or they Pretend they knew all along that that was how it Worked. And he uses the Term Artificial Inflation and Means it, most People you can Probably Ignore when they say "Artificial Inflation" most People have no idea what they are Talking about. But when the 2-3 Million People became 7 Billion, that Bubble, the Bubble that Occurred, the Price Spike that Happened because 7 Billion People that were going to get into Cryptocurrency all did a Run on the Market in 1 Day. It's Artificially Inflated, a Bubble. The Bubble Looks Great, People say "I made $1,000 on $5, you should Buy as many as you can even though it is $1,000" and the Bubble Pops. The Price Drops and Levels out. Now, there is a Possibility that you miss Your Opportunity because you are Concerned about Bubbles and Artificial Inflation, but you could also have Valid Concerns and Scoop up a lot more for much Cheaper, Later. That is why they Call all of this Gambling, because that is the Average Person's Place. Most People aren't Hosting Coins and Websites, they are Trusting the Creator to do it. And that's why the Van Kush Family is coming in to Crypto, as like a Union, but we are the Royal Family of the Stateless Anarchist Society of Cryptocurrency. We aren't just another Coin, we are like Gandalf here, we see the Bigger Picture, and are in Possession of the "1 Ring that Rules them all", kind of Thing. We have been doing this for Thousands of Years with Gemstones and Metals and Currency, we do this Every Time, the Van Kush Family was here all along. It wasn't the Jews by themselves, it was Angels too. Us, we Start all the Wars. So that Bubble, when Everyone Rushes in to a Market, does Level out at some Point, and a Coin will "Find it's Price" which is still able to go up or Down. Bitcoin has yet to completely "Find it's Price", and it may not completely settle to a Price until Mining Ends and Other Blockchains Reward their Miners for Helping Bitcoin Transactions Continue. And so, if you were to Buy a House, and Everyone came in and was Buying Houses it might Raise the Value, that is a kind of "Artificial Inflation", Supply and Demand, Profiteering as some might say. And the Houses don't ever Really find a Price either, they are now just part of the Market like Gold or Silver or Stocks, the Banks just have Houses as Part of it too now.


And Lastly I will get to NFTs, because a lot of People were maybe Tricked and Thought it was Really Cool to Buy an Image of a Monkey or something. You can make a Cryptokitties Game very Simply, I do Suggest that People make these Games, they are interesting for Everyone to Play, and you can make a lot of Money, but you Really need to know what you are doing. This is Art. How do you Buy Art, you Buy Art in a way where you can License it. Maybe don't think of the Art Gallery First, but the Radio Station or the TV Channel, they Buy Art Licenses and use them to make Money by Broadcasting them with Commercials. So if your NFT is going to go up in Value, maybe it needs to be Part of a Movement, it needs to be Licensed on T-Shirts, it needs to be Desired as an Artwork, so that someone will want to Buy it so they can License others and Earn Money on it. But now, having said that, Cryptokitties and these Games can have Rare Pieces, like a Rare Pokemon Card, or Rare Beanie Baby, that you can sometimes have a lot of what is called "Capital Gains" on. The way the Games work is that you get 2 Tokens, NFT Art, and in Cryptokitties they are Cats. You Breed them Together, and you get a New Cat. Many of them are Common, but some of them are Rare, and make other Rare Mixes. I do think that these Games is why Peter Schiff brought the Term "Tulip Mania" in, because if you Breed Your Rare Cat you can Ruin the Market. Labradoodles would be an example of Tulip Mania, it's like Fads, or Trends, or Customs, it was a New Breed, People were all Learning about Allergies, and Gluten, and it was a Hypoallergenic Dog, a "Perfect Storm" could be another Word for Tulip Mania.


I wanted to just Cover all of that, for the Average Bitcoin Consumer/HODLer, or Other Cryptocurrency Consumer/HODLers, and Brokers, so that Everyone can just do this a little Better. I was going to have this be Part of the FTX Thread so that Everyone can see that it was a Crime and these Markets do Work, but I want New Brokers to be able to find this info easily.

This post was modified 4 months ago by

Member Admin
Joined: 7 months ago
Posts: 686
Topic starter  

The Last Words Right in the last like 3 Seconds is Economics for Everyone.

They do get into Stocks, Peter Schiff gives the Great Point of like Buy McDonalds in the 60s and Buy Airplane Stocks in the 20s and 30s, like you can Buy American Airlines or Google Stocks Today, but it’s not going to have that Dramatic Gain from a Penny Stock to a $100 Stock or whatever. You have to make that Prediction that this Company is Valued Low, but Deserves that Stock Buy in, and if you are a Big Investor you Buy 40-50% maybe it’s a Bar or a Club and you Buy Stock, instead of Fast Food and .com, maybe it’s Applebees. Maybe someone becomes 20% Owner of Applebees.


That’s how Stock Works. You want to get into a Company.

This post was modified 4 months ago by

Member Admin
Joined: 7 months ago
Posts: 686


Sign In


Reset Password

Please enter your username or email address, you will receive a link to create a new password via email.