bitcoin_market_participants
Posted in Cryptocurrencies
December 10, 2019

Cryptocurrency Market Participants

The cryptocurrency market consists of the following participants. These participants work together to uphold the success of the Cryptocurrency industry. Being decentralized, any participant can join the market at anytime, but may easily fall out too. We hope that the future will remain decentralized this way, as it eliminates barriers for participation.

Cryptocurrency Exchanges

Cryptocurrency exchanges are the biggest participants of the Cryptocurrency Industry and they facilitate the purchase, sale and exchange of Cryptocurrencies.

Exchanges can either be;

  • Order Book Exchange – Trading engine that matches buy and sell orders.
  • Brokerage Service – Allows users to buy or sell at a given price.
  • Trading Platform – Connects multiple exchanges in one trading panel to allow cross platform arbitrage and/or they allow leveraged trading of derivate type products such as futures, forwards and options.\

Wallets

Wallets exist for the storage and subsequently sending and receiving of Cryptocurrencies. Wallets can either be;

  • Custodial Wallets – Wallet Service Providers control the private keys of the wallets and thus funds in these wallets are held in custody by the wallet service providers on behalf of their users.
  • Non-Custodial Wallets – Users control their own private keys and is thus responsible for the contents and safeguarding of their own wallets.

Payment Providers

Payment Providers facilitate payments for people and merchants. Although payment providers may be diversely structured in their operating business models, they essentially provide services that are fiat-currency facilitated or crypto-currency facilitated;

Fiat-Currency facilitated payment providers focus on;

  • P2P (Person to Person) remittances that are often used in cross border payments for migrant workers
  • B2B (Business to Business) remittances that are often used to reconcile payments between businesses across borders

Crypto-Currency facilitated payment providers focus on;

  • Merchants that accept payments in Cryptocurrencies for goods and services need to ultimately convert their accumulation of Cryptocurrencies for the payments of purchases, overheads, salaries etc.

Miners

Mining exists to uphold the security and integrity of the underlying blockchain of Cryptocurrencies. Miners are rewarded in the Cryptocurrency of the blockchain for providing the computational power required to do so. Mining can be classified as follows;

  • Individual Mining – Individual or organizations allocate their own computer hardware for the hosting of the blockchain and for the confirmation of transactions therein
  • Pool Mining – Multiple individuals or organizations allocate part of their computer hardware to compete for the confirmation of transactions and rewards are split between users in the pool mining community
  • Cloud Mining Services – Organizations that rent out their computer hardware to other Individual or Pool Miners
  • Mining Hardware Manufacturing and Distribution – Organizations that design and build dedicated hardware for the purpose of mining blockchains
  • Remote Hosting Services – Organizations that host and maintain customer owned hardware

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