Editor's Note: This article comes from31QU（ID：blockchain31）Editor's Note: This article comes from
, author: 31QU Zhang Yu, reprinted with authorization by Odaily.
Erdao merchants, commonly known as "Daoye" in Beijing dialect.
The essence of their work is to buy a certain commodity on the production or supplier side, and then sell it, which is actually a middleman. In essence, it is to use information asymmetry to profit.
The difference is that most of them are looking for industries with relatively narrow channels and relatively closed contact between buyers and sellers. It is precisely because of their existence that there are huge profit opportunities in the sales process of certain products.
There is a new term for this behavior in the currency circle, which is called moving bricks.
Unlike moving bricks on the construction site that we usually understand, people who are engaged in Bitcoin moving bricks don’t have to face the loess with their backs against the sky in the scorching summer.
However, can cryptocurrencies that move around really make money?
secondary title
What is arbitrage moving bricks
Arbitrage, also known as "currency arbitrage", is an investment method that earns profit from the price difference between platforms. Sometimes, the price of the same currency on different trading platforms is different, so there is a price difference between the two, and often the price difference is not small.
Simply put, moving bricks means buying the same currency from a trading platform with a relatively low price, then transferring it to a transfer platform such as a wallet, and then choosing a trading platform with a high price to sell it, so as to earn an intermediate spread. .
Generally speaking, because the cryptocurrency market is in the initial stage of barbaric growth, some governments of various countries have not yet formed a systematic regulatory system for it, and some countries that have formed regulations have inconsistent attitudes towards cryptocurrency, so that the encryption of various countries Currency development varies.
In addition, looking at the history of cryptocurrency development, its overall price curve is still on an upward channel, coupled with people's long-term optimism about cryptocurrency.
In the end, despite the difficulty of moving bricks, people still flock to them.
There are two ways to move bricks. The first is the simplest. When it is determined that there is a price difference between a certain cryptocurrency between the two countries, the cryptocurrency is bought from the country with a low price, brought to the country with a high price, and finally sold. This is to earn the difference.
However, it is worth noting that due to the long process of cross-border withdrawals, it can be as fast as a few hours or as slow as a few weeks. In the process of charging and withdrawing, the difference between the two prices is likely to be smoothed out or even reversed.
In addition, there is another method that is more commonly used by brick movers, that is, brick movers own a certain amount of cryptocurrency between two countries at the same time. When there is a price difference between the two markets, the brick mover can buy a certain amount of cryptocurrency in the low price market and sell the same amount of cryptocurrency in the high price market at the same time.
The above two methods are commonly used by players in the currency circle to move bricks.
On September 4th of that year, the "Announcement on Preventing Token Issuance and Financing Risks" issued by the central bank and other seven ministries and commissions clarified that the essence of token financing is an unapproved behavior, and required the immediate cessation of various token financing behaviors. Organizations and individuals who have completed token issuance financing should make arrangements for liquidation.
However, despite the global decline in bitcoin prices caused by this, due to the indentation of domestic regulatory policies, there has been a large price difference between domestic bitcoin prices and foreign markets.
Therefore, under the guidance of significant profits, the trend of going overseas to move bricks has become popular among players in the currency circle.
Some players said that from 15:00 on September 4th to 12:00 on September 5th, there was a significant price difference between domestic and overseas platforms. He made a lot of money by moving "bricks" between platforms in less than 12 hours.
As time came to the end of 2017, Bitcoin broke through a record high and reached $20,000.
“At that time, the entire cryptocurrency market was in full swing.” Lei Bing (pseudonym), a brick-moving player, told 31QU, “This carnival should be a great achievement for South Korean cryptocurrency investors.”
Lei Bing said that at that time, the domestic bitcoin price was around 120,000 RMB, while that in South Korea rose to 150,000 RMB.
"I immediately contacted Fa Xiao in South Korea, and used his identity information to register an account on the Korea Exchange."
Therefore, Lei Bing bought coins in China, and then sold them on the South Korean exchange. Then Faxiao helped him withdraw the Korean won from the bank, and then transferred the money back to China through private institutions, and the cycle repeated.
Lei Bing said proudly: "I made a lot of money this time around, but I can't tell you the exact amount."
Although I made a lot of money, I was also scared because of it.
Lei Bing said that because of the price difference, South Korea’s foreign exchange system was almost destroyed by brick movers all over the world. Large-amount Korean won transfers will be monitored and can only be withdrawn through banks. The attention of the police, a little carelessness, there will be a prison sentence.
“Actually, brick-moving arbitrage is not as profitable as imagined.” Lei Bing told 31QU, “At least it’s not profitable now.”
secondary title
Brick arbitrage does not make money as expected
The essence of arbitrage in the currency circle is to earn different price differences between the same currency on the two platforms. However, there is a prerequisite for earning the price difference, that is, the price difference between different platforms for the same currency must be sufficient to cover the user's transaction costs (handling fees, withdrawal fees, currency price fluctuations within the withdrawal time), otherwise you will move bricks Not worth it.
In addition to the uncertain factors brought about by market fluctuations, there is another role that cannot be ignored in the brick-moving field: exchanges. Its every move will also affect the interests of those who move bricks.
"From the exchange's point of view, the arbitrage phenomenon is a way to attract liquidity. Sometimes, market value maintenance makes a price higher than that of most platforms to attract traffic."
Xiao Heilong said that as an exchange that plays a vital role in brick-moving arbitrage, it is not very repulsive to some users' behavior of moving bricks.
"But there is a limit to everything. If you don't rule it out, it doesn't mean you don't care at all." Xiao Heilong added.
Exchanges hope to increase the exposure of some new currencies, so they will allow a certain amount of arbitrage space, but if it is a mainstream cryptocurrency, the exchange is not willing.
Therefore, for mainstream cryptocurrencies, each exchange will arrange robots to detect them. If arbitrage space is found, it will immediately place an order to fill it up. In this way, brick-moving players will have no profit.
In addition, generally there is a risk of withdrawing coins when moving bricks. As ordinary players in the currency circle, there are generally few people who can deposit a certain amount of funds on each trading platform.
In the process of moving bricks for arbitrage, users generally need to transfer funds back and forth between various exchanges, and transfer funds from exchanges without arbitrage space to exchanges with arbitrage space. However, the withdrawal time is different. It is possible that the original arbitrage space is gone after the transfer, and even the price of the currency has dropped during the withdrawal process, which is lower than the original purchase price. Not only will the mover have no profit , there will also be losses. In addition, the continuous withdrawal of coins back and forth, the handling fee is also a considerable expense.
These are all risks for brick movers.
Furthermore, in addition to the inconsistent prices of popular cryptocurrencies such as Bitcoin among various platforms, there are also different price differences between deposit cryptocurrencies such as USDT, but the price differences are not large. There is very little profit margin.
secondary title
Quantitative trading may be unacceptable in the field of cryptocurrency
"In brick-moving arbitrage, there are generally two types of people." Xiao Heilong said: "One is a small player who simply makes arbitrage by hand, and the other is a professional brick-moving team with a special arbitrage program."
Move bricks through a special arbitrage program, that is, quantitative trading.
A person in charge of an exchange said that quantitative trading, sometimes called automated trading, refers to replacing human subjective judgments with advanced mathematical models, greatly reducing the impact of investor sentiment fluctuations, and avoiding extreme fanaticism or pessimism in the market. To make irrational investment decisions, there are many kinds of quantitative transactions, including cross-platform brick-and-mortar trading, trend trading, hedging arbitrage, triangular arbitrage, intertemporal arbitrage, ETF rotation arbitrage, etc.
Since the 1970s and 1980s, quantitative trading has become an important trading method in the global financial market, and has derived a huge financial system. Today, with the overall improvement of the blockchain industry and the expansion of the digital currency trading market, quantitative transactions have also been introduced into the digital currency market by a large number of teams. At present, there are hundreds of various quantitative teams.
"Quantification is very simple, and the principle is exactly the same as the normal operation of players, but there are many ways to play." Otto, a senior quantitative player in the currency circle, told 31QU, "Moving bricks is just one of the ways to make money."
Otto said that quantitative trading is nothing more than expressing human ideas through machines and codes.
People always have to sleep, and it is impossible to stay focused and rational 24 hours a day. But machines can.
As long as the user sets the various parameters of the transaction in advance, he can let the machine carry out the operation process of buying and selling.
"The only thing to worry about is the imperfection of the machine and the code itself, which will lead to bugs in the transaction process." Otto told 31QU, "But even so, compared with humans, the mistakes made by machines are very few. "
However, although Otto highly admires quantitative trading, he believes that although quantitative trading is speculative, it can only be played by players with high IQ. But another quantitative player, Ren Chong (pseudonym), expressed a different opinion.
He believes that compared with the quantitative trading in the traditional financial market, the quantitative trading in the cryptocurrency market still has various internal and external problems due to its premature development stage and its own characteristics, which makes quantitative trading not very popular in the cryptocurrency market. play its role well.
First of all, compared with traditional stock exchanges, cryptocurrency exchanges are mostly in the field of regulatory gaps, and cannot be sufficiently open and transparent; secondly, the cryptocurrency market is too "unscrupulous".
Ren Chong said that exchanges, as rule-makers, break the rules and disrupt the market order; investment institutions make money, and insider speculation; hacker attacks occur frequently. All of these pose greater challenges to the risk control strategy of quantitative trading.
Tangerines grown in Huainan are oranges, and oranges grown in Huaibei are oranges. The quantitative concept born out of the traditional financial field is more or less unacceptable in the emerging cryptocurrency investment circle.
Regarding quantification and moving bricks, some people think that this is a game for players with high IQ, while some people think that the appearance of these phenomena has disrupted the normal order of the currency circle.
