TL;DR: Suspicious Bitcoin Cash Data Points to Volume Manipulation, one headline roared. Scam Coin? another asked. Prompted by a single tweet, crypto news outlets left just enough room for salt and doubt about Bitcoin Cash (BCH) without having to bother with cumbersome investigations and details. From a lone address, over half a million transactions were made in a relatively short time, that much was clear. Theories flew around the ecosystem about their cause and meaning, none of them particularly sober. CoinSpice confirmed Blitz Ticker is responsible for the transactions, and we were able to chat with the team about their project and its implications.
Tweet Sends Crypto Media Into Tizzy: Bitcoin Cash is a Manipulated Scam!
Readers by now are familiar with the spooky line about a “single address” sending hundreds of thousands of “worthless” transactions, acting as a kind of fee rebate, over the BCH network since 9 April 2019, at times accounting for a significant percentage of its volume. Words like “manipulation” and “sinister,” combined with phrasing such as “prop up”
and “artificially inflate” were casually thrown around.
— I am Nomad (@IamNomad) May 5, 2019
The truth is an international cryptocurrency investment services provider, Blitz (闪速), is behind a kind of experiment. Its Blitz Ticker is “the world’s first rate-publisher on the blockchain,” representative Jun Li explained to CoinSpice. “Every second we will distribute rates of crypto, forex, bullion prices and many more onto the free P2P network. This way, it’s instantly verifiable, unhackable, and forever retrievable.”
When asked about rate publishing and crypto, Li insisted it “is the cornerstone of financial markets, and we think cryptocurrencies should have their own system. Having a live price which is timestamped and can be recalled historically is extremely valuable for trading and all sorts of other purposes. We’re currently in the beta stage and just experimenting with what we can do in terms of publishing data and creating a platform that is easy and free for everybody to use.”
Experimenting With a Rate Publishing Platform
Tick Data is perhaps a more traditional model of what Blitz Ticker is attempting to achieve with BCH. The Virginia based company, no relation to Blitz, has provided a service like it for three decades, but to institutional finance, a heavily data-driven industry. They were one of the first to reveal historical tick-by-tick stock prices, up or down, on futures and index markets, for example.
The Blitz Ticker team Li describes as a group of investors “who have been trading multi-strategies since 2013. After years of using external rates as well as developing internal rates, we decided to experiment with creating a rate publishing platform.” Bitcoin Cash was chosen due to its “high node count, low fees and a good scaling road map, as well as friendly developers we can reach out to for collaborative work,” Li insisted. “We’re blockchain agnostic however, and as we develop further, we’ll look into a variety of options.”
A trader associated with the group stressed traffic generated was “not manufactured,” as all of it “serves a purpose: i.e. specifically to publish data.” Li quickly agreed, noting, “Considering it costs money to transact, we’re not burning money for ideological reasons,” batting aside ‘propping up’ concerns. “There’s a specific purpose to all of these transactions and that is to allow the data publishing to work. All of the volume is there for the purpose of publishing data once per second. There’s a clear and specific purpose to it; and that purpose is certainly not manipulation of any kind,” Li doubled-down.
FUD and Unavoidable Haters
When asked about fear, uncertainty and doubt coming as a result of their data experiments, Li got philosophical. “I think the FUD stems from the unknown – once people realise what the transactions are, then it should be clear that they have no nefarious purpose behind them.” Blitz Ticker is attempting to set its team up as the “gold standard” for crypto finance use cases. “We’re still experimenting, and will release more info in the future. For now we’re just trying out this new tech and seeing what we can do with it,” Li urged. “It’s still early days and it’s still beta, but it can also be used for trading. We use the data internally for our trading.”
The unnamed Blitz trader admitted, “We don’t know specifically how it will play out hence the experimental platform design for now.” As to the notion such experiments give out false metrics, the trader further detailed, “We are using single known addresses with 1b1itz in the beginning. We expect 1 second per transaction volume to be easily calculated which should make it easy for people to discount what volume they deem as ‘fake.’ But haters will hate and that is unavoidable. Any blockchain will work, if some other dev team would spare the time to work with us, we are happy to collaborate.”
As of this writing, Blitz Ticker’s results have yet to be published. A team member warned they were “having some issues with cache data at the moment, and eventually we will go with a mix of BitMEX and Bitfinex data that we use internally as well as some bullion forex during beta testing. The documentation page should make it easier for people to understand how to consume the data. It is nowhere close to what is needed for commercial consumption but at least people can start reading off the blockchain directly. We need a full set of on-chain data for at least three months before meaningful analysis or functionality can be derived.”
The team hopes to be gathering data for a year, at least. “The main value proposition is immediate and verifiable rate publishing,” a trader insisted. “But after a year, we think there will be extra value with historical data analysis as well as higher trust factor for being the first and oldest rate publisher on-chain. We need to monitor rates from a variety of sources. The money we spend on making sure our indicators are correct is magnitudes higher than a year of tick data on-chain. We had this idea years ago. The price dip 6 months ago just triggered us to explore options amongst the public blockchains,” he claimed.
DISCLOSURE: The author holds cryptocurrency as part of his financial portfolio, including BCH.
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