This post was last updated on July 5th, 2019 at 09:11 pm
If you’ve ever:
… then you know that we here at Nomics are obsessed with market data, transparency, APIs, and exposing industry shenanigans. Crypto data is all we think about. All day, every day. (We’re pretty boring people).
But, unfortunately, the market has so much further to go when it comes to:
- Understanding how crypto market data works
- Grasping how exchanges simulate fake volume to swindle you
- Knowing what the bad actors have in common
But it doesn’t stop there.
Through phone calls with countless institutional customers (of the Nomics API) — and even more prospective customers — I’ve realized an unfortunate truth.
An Unfortunate Truth
Most sophisticated blockchain developers and institutional investors fall into one of the following two categories:
- They have a fantastic grasp of blockchain data, but don’t understand the first thing about how crypto market data works.
- They understand how market data works within the legacy financial system, but don’t understand crypto data basics.
Indeed, one of the biggest challenges we face — as a data provider — is that our customers often don’t know the specific data requirements needed to answer their questions.
For example . . .
- Do they need aggregate pricing information, or just exchange trading pairs?
- Are they better off using 1-minute historical candles or raw trade data?
- Should they trust candles created by exchanges, or should they compute candles themselves?
- Why are RESTful APIs (vs. web sockets) better when it’s imperative that you have gapless datasets?
- What kind of order book data do you need to backtest your liquidity assumptions?
We created the Crypto Market Data IQ test to help educate cryptoland about market data.
We feel that this education is sorely needed.
The test is difficult, and most folks (even experienced investors) don’t do as well as they anticipate. But the purpose of this test isn’t to embarrass you; it’s to teach. We wanted to share what we know about the fundamental building blocks that power the cryptosphere’s market data infrastructure.
Because we believe that an educated market . . . is a market that (1) demands transparency, (2) asks better questions, and (3) holds the entire industry to a higher standard.