Being Coinscious, Re-imagining Crypto Trading

The anonymity and pseudonymity that blockchain offers is a massive part of its allure. To ensure the security of transactions, maintaining anonymity is imperative for Blockchain’s success which is otherwise not possible in the current system of fund transactions. Yet, most popular Blockchain ledgers aren’t completely anonymous as all transactions are linked to a unique address. What they provide is pseudonymity: anybody can create a bitcoin address, and there is no way to connect that address to a person without information from another source.

Coinscious, a promising new startup hopes to find a remedy for this inevitable “teething problem” which all markets have to go through in their early stages. The startup plans to come up with “actionable insights” for crypto-trading through data services, augmented with an AI-based software suit. The suit encompasses almost all of the latest technology of the day, except, perhaps, virtual reality – because AI, blockchain, meep machine learning, and big data, are all there.

Not all data that influence prices are on the blockchain. Hence, all of the data ranging from who, when, and for how much a token was sold makes no sense without the wider context. The movements of Bitcoin tokens often correlate and respond to actual events in the real world – corporate announcements, management changes, partnerships, and media coverage.

Coincious’s platform takes things up a notch by crawling through social media such as Twitter and news outlets while combing for bits of token-related “sentiment” from posts and articles. All this raw data is processed into a normalized, systematic array of data about what happened to a token on the blockchain or elsewhere so that the trader may see an analysis of not only what happened, but also, why.

Seeing is Believing

Human brains aren’t redundant yet as Coinscious’s data services allows traders to come up with a hypothesis and back-test them – but it still takes a fair bit of logical reasoning to come to a conclusion like “Token A has seen a 60% rise after the combination of events B, C, and D happening.”

Coinscious is developing a machine learning logic that will work in tandem with the data services. The algorithm will process massive amounts of constantly updated data, learning to identify patterns of “disturbances in the force”. It will detect attempts to artificially pump a coin, and notify the user enabling him/her to piggyback on someone else’s effort to boost their coin. Or the system can also alert the community about an attempted fraud.

Phasing Out the Weak Link

Coinscious hopes that down the line, the system will develop enough that human interaction will be minimised to just decision making for the actual trading – the data and insights will be already processed, available at the desk, so that the trader could wage his or her bets. For example if a trader aided with AI and machine learning tools, comes up with a strategy “If events A, B, and C all happened to coin Z, buy coin Z because in a week, there is a 95% probability that it will be worth 20% more.”

This trader will program and deploy a trading bot with the same strategy, and let it process the free data. Until some fundamental changes take place, the successful strategy might keep earning speculative interest for its master.

Looking to the Future

Unlike many emerging blockchain projects, Coinscious doesn’t seem to be too hasty about going “public” and launching a token by means of an ICO. They do have a white paper, and imply that the project may take off at some point in the future may, but as of October 2018, Coinscious’ team prefers devote their energy on launching a working product first. Coinscious plans business plan starts off by selling data products, that include millionth-second level trading history and orderbook data, blockchain and social media updates. Traders will be able to simulate and backtest (i.e. validate) their strategies using these tools.

Coinscious speculates that existing quantitative trading strategies can be quantified using all the quality data available, and allow the emergence of crypto-specific trading strategies. The company’s management also believes the entire market will benefit from the project by emerging from increased transparency. If the project emerges successful, it will demonstrate the irrelevancy of humans on the crypto- (or any) trading floor. Only time will tell if humans will become redundant in crypto trading. But if anything is clear, it’s that the crypto industry is thriving at the cutting edge of technology.

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