Let's make one post without putting in the category tag and see what happen. Today I'm going to share with you of my understanding on crypto market and some trading lingo that is important.
This for example, is the market place in your #hive wallet. If You can scroll your mouse pointer over to the green peaks and the red peaks to see the available volume and the detail pricing on each zones. Before we find out how to use it, one thing we need to be sure is, how to interpret the numbers in this screen?
Denominator
For every tradable tools, the market place has to denominate with one principal currency, in this case #hive is the denominated currency. It's simple because it already spelt on the screen, buy HIVE, sell HIVE. Now don't get me wrong, if you're on an exchange wallet, things can get slightly complicated because you can do transaction with different type of cryptos/currencies. The above HIVE wallet, by default the denominator is HIVE, and its supposed to paired with HBD at the back. If we view it from the official exchange board, this is supposed to be named as HIVE/HBD.
Numerator
Since we have a denominator and we know it's #hive, the next best thing to understand on this internal market, is the #numerator, which is the #hbd. Why is it not USD? It can be, when you're in your exchange. It can be EUR, it can be any other preferred currency by the exchange or their availability. In this case, HIVE is the denominator, whereas HBD is the numerator. If we view it from the official exchange board, this is supposed to be named as HIVE/HBD.
Why go UP?
This is a very subjective topic. You see, we've been trained since we know how to count. When number is increasing, we call it up, when number is decreasing, we call it down. Just because crypto price going up rapidly, and it was then called as a process of "going to the moon", because of the price keep going "up". Let's look at things in a smarter manner, UP simply mean the denominated currency is gaining strength against the numerator currency. Unfortunately, nobody pay attention to the "up" in the internal market. All that any other person care is how much HIVE/USD "UP". Matter of fact, I'm looking for "DOWN" in the internal market, because that would means I can spend less HBD to buy a larger valume of HIVE. Complicated? Stay tune, we will cover this at the following paragraph.
Why is it not trading the same value as the feed
Let's capture the current price of #hive from
@coingecko... wait?! Why is the price different? Perhaps you have forgotten, the denomination for price feed at @coingecko is HIVE/USD. But the one we read from internal market is HIVE/HBD. Hence the difference.HIVE/USD = $0.173
HIVE/HBD = H$0.229
Here's the reason, why "DOWN" can be a good thing in internal market. "DOWN" does not necessarily mean the value goes down, if the numerator(HBD in this case) value increased, it will result in "DOWN" in the exchange value in the internal market. Imagine, if HBD shoot up like SBD happened in 2017 to $15, use your HIVE 0.173 divide by 15, what do you get? The exchange rate will turned to 0.011. Which means, each HBD you can exchange with 86.705HIVE. WOHOOOOOOO... Now don't get too carried away, the original idea of SBD was designed to balanced the value of STEEM. When the SBD price too high, people will use it to buy STEEM instead. So, automatically the value of the cryptocurrency will shift from SBD to STEEM. I assume it will happen the same here in HIVE. There's no use case in HBD other than use it to pay as author reward.
Summary
And therefore, understanding these terms, knowing which are the denominator and numerator is very important and crucial. In coming episode, we will be using the same terminology to find out why is it go "UP" and how do we squeeze some juice out of it.