Arbitrage — What it is and how it works

Arbitrage refers to the process of instantly trading one or more pairs of currencies or odds for a nigh risk-free profit.

Usually, this involves two exchanges (this is then called a two-legged arbitrage); although more are, of course, possible.

crypto currency arbitrage

There are several steps when executing an arbitrage:

Find a suitable opportunity
Execute trades
Rebalance accounts

Step 1: Find a suitable opportunity

This step is relatively easy. Simply check the order books of as many exchanges as you like, compare bids vs asks, and check if you can find a negative spread.

A small discourse into what a spread is

I will assume you're familiar with bids, asks and what an order book is — if not, you should definitely look up those first. As for the negative spread, I'll elaborate a bit more on that. The spread is what is used to refer to the difference between bids and asks — lowest ask — highest bid = spread. This should be (and typically is) a positive value, since the best bid at an exchange must be lower than the lowest ask of an exchange — otherwise the matching engine of the exchange would settle these orders automatically.

In a perfect world, all markets and all market participants would have the same information, hence all top bids and all top asks of all exchanges would be the exact same, after fees were applied.

If you've seen the recent US elections, however, you're probably aware that the world isn't perfect, though. Hence, not all participants of a market know the same thing as the others, resulting in bids at exchanges which are higher than the asks at other exchanges — and this is what is called a negative spread.

Step 2: Execute trades

Let's assume you've found an amazing opportunity at exchange A and exchange B — a negative spread of 100$!

Exchange A: Ask 1BTC@450$
Exchange B: Bid 1BTC@550$

Luckily, you have proper funding at both to match these instantly — but how do you go about doing that? Easy! Just place an order on the opposite side at each exchange with the quote's prices!

Exchange A: Place Bid of 1BTC@450$
Exchange B: Place Ask of 1BTC@550$

Since your placed order match an order on the opposite side of the book, the trading engine matches them and the trade is settled, leaving you with a theoretical profit of a smooth 100$! Why theoretically, you ask? I'll get to that point further below.

Step 3: Rebalance Accounts

Unfortunately, you were only able to trade once today, but hey! Tomorrow's another day — but in order to be able to properly trade, you need to even out your balances. Right now, your accounts look like this:

Exchange A: 2 BTC | 50$
Exchange B: 0 BTC | 1050$

Hence, you go about and send 1 BTC from Exchange A to Exchange B, and 550$ dollars to Exchange A from Exchange B. No magic here — all accounts are re-balanced and you're ready to make a fortune again, tomorrow.

Exchange A: 1 BTC | 550$
Exchange B: 1 BTC | 550$ 

Arbitrage — Why everyone's not doing it

This all sounded wonderful? That's exactly what I thought when I first set out with my own arbitrage bot. However, there a some technical aspects that can really turn a sunny day into a poopy rain on your parade.

Caveats and risks

1. It needs to be as close to real-time as possible

This is possibly one of the hardest things to get right, and also the most underestimated aspect of arbitrage in crypto currency. The markets, compared to ForEx trading, are ridiculously slow — at busy exchanges, there may be a couple of dozen trades executed. Which gives the illusion, that polling data for bots via the most common API type, RESTful, is enough to trade risk-free. This is a misconception. Maybe for today this may appear to be enough — but what if markets picked up the pace? just 1 trade (or simply a placed order) within one second can change your opportunity from profit to loss.

2. Always trade limits, never market orders

Under the aspect of being the fastest, it might seem like a good idea to use market orders in order to be settled asap — you'd be terribly wrong. As discussed above, your data could be as old as 1 second (with above mentioned one order messing up your opportunity) — perhaps someone cleared the entire top level and all you're left with is a bid for twice the price you intended. Yikes.

3. REST API call rates make your life hard

Many exchanges employ a API call rate limit — that is, you're allowed to query data at the exchange X times every Y seconds. The differences are wide and nearly every exchange does its own little thing when it comes to limits. The problem with them is, they severely limit your actions. If you don't constantly keep an eye on how often you send a request, you might run into the limit when it seriously counts — for example when you have to cancel an order, because you couldn't place its counter part at another exchange. Unfortunately, websocket APIs are still rare and their brother on steroids, FIX sockets, even rarer — leaving you stuck with the turtle of programmable interfaces.

4. Integration with APIs can be a nightmare

There is no unified, standard definition for what an exchange API can do, or what data it returns. Which technically wouldn't be a problem, if they were documented properly. Incidentally, the exchanges with seemingly many opportunities also have the worst documentation (take btc-e.com's Documentation for example — heresy!). Of course, also the opposite is true — GDAX, Kraken, Bitfinex all have excellent documentation. But nonetheless you have to dig through them to understand how they work, what their rates are, how they handle data types, authentication and so forth. That is, if they even mention anything about that.

5. Fees will minimize, if not eliminate your profits

In my above step-by-step guide, I purposely omitted fees of all kind. But of course, they're essential to successfully arbitraging. The most commonly known fees, are trade commission fees — these range anywhere from 0.1% to 0.6% and need to be considered in Step 1: Find a suitable Opportunity. On top come fees for deposits and withdrawals during Step 3: Rebalancing Accounts. Depending on your preferred pair, these may range from feasible (transferring crypto currencies usually is cheap enough) to quite steep. For example, a deposit / withdrawal at Bitfinex entails the following fees:

Bank wire withdrawal & Deposit: 0.1% of amount deposited/withdrawn, 20$ minimum
And this does not include processing fees of your house bank — for me, for example, that's an additional 10€ for deposits, plus a 1% conversion fee. If you do the math you'll quickly realize that you don't even have to bother starting to trade at Bitfinex, unless you have a really big stack to trade with.

But this does not just apply to BTC-Fiat pairs. Alt-coins suffer a similar fate. In order to make arbitraging worthwhile, you will have to have enough funds at as many exchanges to make trades AND re-balancing worthwhile. And this quickly gets to a point where you realize your last month's savings aren't equipped to get the job done.

To give you a further example on how fees affect your profits, let's take a look back at the example from step 2, this time factoring in all fees. I'll walk you through it. For the argument's sake, we'll pretend to be a european trading BTCUSD at Bitfinex (Exchange A) and Kraken (Exchange B).

Bitfinex: Ask 1BTC@450$
Kraken: Bid 1BTC@550$ These prices are raw- they do not include trade commission fees, not transaction fees. Let's add those….

We'll define a taker fee of 0.25% at both exchange — the taker fee applies whenever you remove liquidity from the order book. Next, let's add deposit & withdrawal fees to the mix. At Bitfinex, we pay a minimum of 20$ for each fiat withdrawal & deposit, or 0.1% of the moved amount (if its more than 500$). At Kraken, we pay 0.09€ per fiat withdrawal, deposits are free. In addition, btc withdrawals cost 0.0005 BTC at kraken, while Bitfinex charges no fees for this. Deposits cost nothing at both exchanges. Furthermore, we can't transfer fiat directly from exchange to exchange — an additional 10€ fee per sent out transaction needs to be facotred in, as well as 1% conversion fee whenever we receive or send fiat from our bank account (2 times total).

Let's list these fees to try and maintain an overview

  1. Profit from arbitrage (bid — fee — ask + fee )
  2. Withdrawal Fee Bitfinex (20$)
  3. Deposit Fee Kraken (0.0$)
  4. Miner Fee for withdrawal at Kraken (0.0005BTC)
  5. Transaction Cost of our house bank (10€) (Bank to Bitfinex)
  6. Conversion Fee of our house Bank (1% of transfer amount x 2)

Let's put some numbers to these:

  1. (550 — 550*0.0025) — (450 + 450 * 0.0025) = 97.5$
  2. Move ~497$ to House bank = 20$
  3. 0.0$
  4. 0.0005BTC * 500$ = 0.25$ # Assuming this is the end of day price of the coin
  5. 10€ * 1.05 = 10.05$
  6. (497 * 0.02) = 9.94$

Which brings us to net profit of: 57.26$ This translates to 42.74% reduction of your originally seen profit.

This is neither a worst, nor a best case scenario — it's merely designed to show you how many hidden fees are involved in an arbitrage. Also, keep in mind that a 22% arbitrage opportunity is practically non-existant.

As a matter of fact, had the spread been anything less than 40$, the fixed fees of our house bank and Bitfinex alone would have made our supposed arbirtrage opportunity a loss.

6. Volatility of coins is your enemy

"No matter where the market goes, arbitrage makes a profit anyway!"

This is true — if your currencies don't tend to drop or rise by 50% within 24 hours. Ideally, both currencies you trade in should be relatively stable, while still showing a certain volatility — no volatility would mean the chart is a flat line, resulting in no opportunities for you.

The problem with pure crypto currency arbitrage (LTCBTC), however, is that Alt-coins can go completely fubar — as opposed to a fiat-based crypto arbitrage (i.e. BTCUSD). A personal anecdote:

When ZEC launched, I was instantly fascinated at the terrible market efficiency and arbitrage opportunities of almost 5% regularly. Hence, I bought in at 1ZEC@1.2BTC, thinking this is probably where market will stay at (at least it's not as bad as the guy who bought a ZEC for 3k BTC). I started arbitraging and immediately increased the amount of ZEC I was holding — completely oblivious to the fact that since I started trading, the price had fallen to 1ZEC@0.1BTC. My ZEC was worth 90% less, and I lost almost half a bitcoin worth of money.

Some volatility is great for arbitrage — too much volatility isn't.

7. Exchanges aren't as technically robust as they ought to be

Most of the time, you will find that smaller exchanges offer opportunities more often than big exchanges. This is in part due to the previously mentioned slow movement of information, but also their (often significantly lower) trading volume. Initially, this may appear like a steal — but there's usually a reason that particular exchange only has the low volume it currently does.

In a time where any one in the world can open up an exchange running on his raspberrypi and Ethereum, trading on the more alternative exchanges can be a serious risk to your investment.

From things like DDOS attacks and overloaded matching engines not matching your orders, to more serious issues like stuck withdrawals due to too low miner fees, or even theft — and the latter is a very omnipresent issue not exclusively affecting small exchanges, as the Bitfinex Heist has shown this summer; the list of potential technical failures is long and you should be aware of these at all times.

Conclusion

I'm aware this answer is overtly negative — this was intentional. Arbitrage, as well as crypto currency in general, is not the quick buck everyone on forums and dubious sites advertising trading bots make you believe. While its inner mechanisms and workings are still quite cryptic* to even the most professional traders (sorry for the pun), even the fabled cryptographic adheres to some basic principles, afterall. The 'quick way to wealth' usually will just end up quickly making you wealthless.

Start by opening up some of the well known exchanges … do not use ones such as localbitcoins .. far too risky. A good one is OKCoin.com as they have a good verification system.

(*) Another great myth is that the chinese dictate the BTCUSD market. There is no empirical proven correlation between chinese and american markets. The only defacto correlation that has been found was that of google searches for bitcoin to btc trading volume — but whether this was positive or negative was inclusive.

If you believe that my message is worth spreading, please use the share buttons if they show on this page.

Stephen Hodgkiss
Chief Engineer at MarketHive

markethive.com


Alan Zibluk Markethive Founding Member

Georgia Records 100,000 Land Titles on Bitcoin Blockchain: BitFury

Georgia Records 100,000 Land Titles on Bitcoin Blockchain: BitFury

  

Georgian government and the Bitcoin company BitFury

In April 2016, the Georgian government and the Bitcoin company BitFury initiated a project to record land titles on the Blockchain. Following the project initiation, on Feb. 7th, 2017, in Tbilisi, the government of Georgia signed an agreement to use the Bitcoin Blockchain to verify property transactions.

And on 19th of April 2017, Valery Vavilov, CEO of BitFury during his speech at the Russian Internet Forum in Moscow, said, that since the launch in February 2017, when his company along with the government of the Republic of Georgia implemented the property registration on Blockchain had registered more than 100,000 documents.

Earlier this year, Tomicah Tillemann, Trust Accelerator co-founder and New America director of the Bretton Woods II program, commented about Georgia’s decision to use the public Bitcoin Blockchain:

“If you think about this happening at a time when a lot of people are struggling to separate what’s real from what’s fake, this is a powerful tool to prove what’s real. Especially when you’re dealing with something as fundamental as your home or property, it’s important to have that added layer of security that’s provided by Blockchain validation.”

Vavilov also said, that there is going to be more services to follow. Since Blockchain implementation, there is no possibility to manipulate the property registration data. It is not only a government implementation deal for BitFury, on April 13, the Bitfury Group has announced its partnership with the government of Ukraine, to bring a variety of Blockchain solutions to the electronic services of the latter.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Blockchain Is Helping to Build a New Kind of Energy Grid

Blockchain Is Helping to Build a New Kind of Energy Grid

Using the technology behind Bitcoin, participants in the Brooklyn Microgrid are buying and selling locally generated renewable energy over a peer-to-peer network.

If you have solar panels

that produce more energy than you need, you can sell the excess to a utility company. But what if you could sell it to your neighbor instead? A company called LO3 Energy has developed a system that lets people buy and sell locally generated solar energy within their communities. The system uses blockchain—the electronic ledger technology that underpins the digital currency Bitcoin—to facilitate and record the transactions.

Distributing energy this way is more efficient than transmitting energy over distances, said LO3’s founder, Lawrence Orsini, and would make neighborhoods more resilient to power outages, as well as helping meet demand when energy needs exceed expectations. It’s also in line with growing public support for renewable energy, distributed and decentralized energy systems, and “buy local” programs in general. At Business of Blockchain, a conference organized by MIT Technology Review and the MIT Media Lab, Orsini said that 69 percent of consumers told the technology consultancy Accenture that they were interested in having an energy-trading marketplace, and 47 percent said they planned to sign up for community solar projects.

LO3 Energy launched its peer-to-peer energy transactions system, which it calls the Brooklyn Microgrid, about a year ago. The miniature utility grid connects people who have solar panels on their roofs in several parts of Brooklyn with neighbors who want to buy locally generated green energy. Like other microgrids, it operates alongside, but separate from, the traditional energy grid. Blockchain makes the Brooklyn Microgrid possible, Orsini said. Participants install smart meters equipped with the technology, that tracks the energy they generate and consume. Records of the automatic “smart contracts” that enable neighbor-to-neighbor transactions are also tracked using blockchain. LO3 Energy hired the software maker ConsenSys to build the system, which is based on the blockchain-based distributed computing platform Ethereum.

“Blockchain is a really good communications protocol for what we want to do,” Orsini said at the conference. “This isn’t just about settling energy bills,” he added. “It’s about self-organizing at the grid edge, which can’t be done with normal databases.” Could microgrids like this shake up the energy industry? At the moment, Brooklyn Microgrid consists of only 50 physical nodes, but Orsini signed a partnership with German conglomerate Siemens in November and is talking to regulators in the U.S., Australia, and Europe about expansion. He is also willing to collaborate with utilities. “We’re not putting the utilities out of business, but we want their business model to evolve,” he said.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

What Blockchain Is, And Why Some Experts Say It’s As Revolutionary As The Internet

What Blockchain Is,
And Why Some Experts Say It's As Revolutionary As The Internet

  

IBM Blockchain user interface designers

Dante Guintu, left, and Andrea Lee work on secure blockchain apps at IBM San Francisco in February 2016. (George Nikitin/Feature Photo Service for IBM, via AP) Tech experts say it's the next major revolution that could change our lives as drastically as the internet once did. (I know, it's hard to fathom, but try to think back to card catalogs.) It's called "blockchain" and was the subject of a recent event organized by the MIT Technology Review. If you're not familiar with the concept, read on. We hope to answer some basic questions.

What is the blockchain?

If you've ever tried to run a business, you're probably familiar with the idea of a ledger — a written list of transactions (think Excel or an old-school balance sheet in a binder). Essentially every multinational corporation or small Mom and Pop business uses ledgers to track sales and expenses.

In the most basic form, a blockchain refers to a shared digital ledger. "It's a global ledger that can record any transaction, and it'll keep that transaction and all the details associated with that transaction secure," explained Jalak Jobanputra, who runs Future Perfect Ventures, an early-stage venture capital fund that focuses on investments in blockchain technology. And by having this system digital and public, blockchain advocates say it makes it easier to prove, track, trust and audit transactions.

The Buzz Behind 'Blockchain'

Blockchain got its start as the underlying technology behind Bitcoin, a decentralized digital cryptocurrency created in 2009. But while Bitcoin has had ups and downs over the years, for Neha Narula, who leads the Digital Currency Initiative at the MIT Media Lab, Bitcoin proved it was possible to send payments from one person to another securely without a "trusted third party." "We just quite simply hadn't seen that before," Narula said. "We'd never seen digital money transfer without a bank being involved and now we see it. And it's pretty cool and it's given us a lot of ideas for other things we could do."

Why is this tech considered so revolutionary? 

Tech experts say the blockhain can be used for so much more than Bitcoin. For example: It's being used by a startup called Everledger to track diamonds (so fake rocks and blood diamonds can be found more easily); it's being used by Walmart and IBM in China to track pork (so recalling contaminated food would be easier to handle); and it could be used in our modern banking system (so that you could more easily and securely transfer money between bank accounts).

It's the potential to cut out the middleman and create a digital record, more than the current reality of Bitcoin, that excites tech experts. "In a world where we trust our institutions less and less, having technologies that help us conduct business and get things done without needing to depend on central third parties seems ever more important," said Brian Behlendorf, the director of hyperledger, an umbrella project for open source blockchains.

Many companies and startups compare the blockchain world to the early days of the internet — it's decentralized and permission-less. "It's in some ways a little less sexy, a little harder to understand [than the internet], but for the people who get it, this suddenly becomes exciting," said Behlendorf, who believes this technology will revolutionize transactions the way the internet revolutionized communication.

OK, so if this is akin to the early days of the internet, where are we in that timeline? 

I asked this question to a few different people working in the blockchain arena, and here's what they said.

Behlendorf:

I'd say it's '95/'96, we're still before seeing a lot of return on the investments people are making in this space … but the value is becoming evident … but even in those early days, there was still this — why should we bother? Why should we make this happen?

Amber Baldet, who leads blockchain efforts at JP Morgan:

I don't think it's the '90s, I think it's closer to the late '60s. I keep a diagram behind my desk of ARPANET in 1969 … the proto-internet of these kinds of closed networks at the time that were completely academic. And those architectural diagrams look remarkably similar to the pilot … diagrams that are connecting a couple of banks [in a blockchain]. So I think we're really in that early of a days of the internet. But if you accept that the rate of technological change has increased … we'll probably see an explosion of innovation within the blockchain space over the next five, 10 to 20 years.

Narula:

I think we're actually in the '80s, we've got a ways to go. And what I mean by that is we're still figuring out some really basic underlying protocols. … This is the stage where there's a bunch of nerds sitting at Berkeley and MIT and CMU and UCLA who are sending each other emails, that's the stage we're at.

But for Narula, there's one key difference that makes this moment kind of "weird" and "scary." "Back then it was a bunch of scientists, you know, working in universities and government-funded research labs. No one was paying attention," she said. "Now, you've had all this attention … every major bank has people focusing on a blockchain." Experts say roughly $1 billion of venture capital money went toward blockchain startups in 2015. And Narula's not sure what that investment money means for the technology.

Blockchain bubble? 

Back in 2014, Felix Salmon, a financial journalist, and a high-profile Bitcoin skeptic, made a bet on NPR's "Planet Money" that bitcoin was a bubble that would burst. It hasn't popped yet, but it also hasn't become commonplace. According to the 2015 Survey of Consumer Payment Choice by the Federal Reserve of Boston, less than half of Americans had heard of any form of virtual currency. (Here's more from the Boston Fed on awareness of virtual currencies.) Still, even if Bitcoin fails, it's the underlying technology that could be resilient and revolutionary.

But how revolutionary is the question? Earth-shattering or just merely important. "The Bitcoin client is about 30,000 lines of code," Emin Gün Sirer, a professor at Cornell University, said at the MIT Tech Review conference. And he points out that in general code is "buggy." Gün Sirer has been researching ways in which the blockchain can fail. And while he believes blockchains "offer a completely different way of looking at the world and completely transforming it," he's also concerned some of the million-dollar VC funding is hype.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

European Commission Backs Blockchain Pilot With €500k Budget

European Commission Backs Blockchain Pilot With €500k Budget

  

The European Union’s executive branch

is establishing an "observatory" focused on blockchain as part of a wider pilot project. Unveiled earlier this week, the initiative, according to the European Commission, seeks to to "gather opinions and to voice concerns around Blockchain and DLT". The Commission plans to solicit proposals from possible partners during the second quarter of this year.

Late last month, the Commission revealed that it would seek to improve its institutional knowledge through the pilot, operating in tandem with a task force created by the European Parliament last year. The announcement includes some new details about the pilot, including its two-year duration and its €500k budget. And while the scope of the project centers primarily on education, there do appear to be some practical elements, including a plan to "build and animate a platform for the European blockchain community".Ultimately, the pilot could lead to new policies in the EU centered around blockchain.

As the Commission explained:

"The purpose will be to inform and assist the European Commission in understanding what role — if any — European public authorities should play to encourage the development and up-take of these technologies and to formulate related policy recommendations."

Whether any of the tests translate into actual applications of the tech by the Commission remains to be seen. However, according to the announcement, the body said it wants "explore possible use cases with a value added at EU level" — indicating that such approaches are possible.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Blockchain: A Technology Whose Time Has Come

Blockchain:
A Technology Whose Time Has Come

  

They thought I was nuts…

It was 2003. I was moving from my retail money-management business to managing an exclusive hedge fund. My parting gift to my retail clients was Apple (AAPL). But not everybody was on board. When I told them about Apple, they thought I was crazy… Many of my clients were skeptical. I understood why. At that time, Apple was trading at the same price it had been in 1982. The stock price had done nothing in 21 years.

But I knew Apple had a new technology in the pipeline… It was the iPod. Up until then, you could only use the iPod on an Apple Mac. In 2002, Apple announced that it was finally rolling out a PC version.

This was a huge shift…

All of a sudden, the hottest music player in the world would be available to the biggest pool of technology buyers in the world. This was a no-brainer investment. Why didn’t everyone jump on it? The reason is simple: Apple was deeply misunderstood. People saw the iPod as a niche product. I saw the iPod as the next generation’s Walkman. (The Walkman was a personal cassette player made by Sony. It dominated the 1980s.)

The clients who believed in me had the chance to make a small mint.

Over the next decade, a $10,000 investment would have ballooned to nearly a half-million dollars. The iPod was once a disruptive technology. It almost single-handedly killed off the compact disc (CD). It was one of those rare opportunities to make a fortune on a truly groundbreaking idea. Now, I don’t recount this story to brag… I want to show you why it’s so important to get into a revolutionary idea as early as possible.

The results can be life-changing…

For a while now, I’ve been on the soapbox preaching the virtues of cryptocurrencies. I’ve been so bullish on them that I’ve even received letters from my subscribers calling me “obsessive.” And that’s fine. I understand why it may seem that way to you.

But consider this…

I had to drag my retail clients kicking and screaming into Apple back in 2003. If I wasn’t so “obsessive” then, they would have missed out on the iPod 49:1 money train. So there’s a reason for my bullishness. I don’t want you to miss today’s opportunity before it slips away. And time is running out… The game-changing technology I’m referring to is called the blockchain. The blockchain is the backbone of the cryptocurrency industry. It tracks the transactions of digital money like a traditional ledger tracks bank transactions.

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Here’s why the blockchain will be so revolutionary…

Today, it’s the transaction system for the burgeoning digital currency industry. But soon, you’ll be able to conduct all kinds of other transactions on the blockchain — from trading stocks to buying real estate. And you’ll be able to do it in a fraction of the time and cost that it takes to do them today. Here’s an example of what I’m talking about… Last September, I told my readers about the first international trade deal ever conducted over the blockchain. The trade was facilitated by Barclays Bank. It involved the purchase of $100,000 in butter and cheese.

What’s so amazing about this rather mundane trade?

Normally, trades like this take an average of 10 days to complete. They require hundreds—sometimes thousands—of documents to be signed. But Barclays completed the trade using the blockchain in a mind-blowing four hours. The finance trade industry conducts $2 trillion in transactions each year. It’s more than 400 years old. And the blockchain completely changed the game in four hours. Think of all the savings (and reduced paperwork) this new technology will create for the industry.

That’s what a disruptive technology looks like.

But not everybody recognizes it yet. Just like they didn’t recognize how disruptive the iPod would be. The mainstream media hasn’t picked up on the blockchain yet. And few in the public even know what it is. (Ask your family and friends if they’ve ever heard of it; the answer is likely “no.”) So now is the perfect time to get in: when the technology is about to take off… but right before the herd comes storming in. If you wait too much longer… you’ll be too late.

Not convinced this technology is set to explode?

Well, there’s more… Events are unfolding quickly. In addition to the Barclays trade in September:

  • The Depository Trust & Clearing Corporation (DTCC) announced that it would start replacing its databases with bitcoin-based blockchain technology. (DTCC handles $11.7 trillion in credit swaps alone.)
  • Global accounting firm KPMG has launched blockchain services for banks and other financial institutions.
  • The Sydney Stock Exchange has declared its intention to move to blockchain settlement.

And that’s just a small sampling of what’s going on right now, “hidden in plain view.” The writing is on the wall, as they say. The blockchain is rapidly becoming a reality. Soon, the mainstream media and public at large will be hip to it. But by then, the upside will be gone… So the timing is urgent. That’s why I’ll continue to pound away until more investors like you realize this opportunity… Just like I did with my clients back in 2003 until they saw the light about Apple.

If you’d like to play this trend, I recommend you buy a small amount of bitcoin. Many of the blockchain technologies arising today are based on Bitcoin’s technology. But Bitcoin isn’t the only blockchain I’m currently bullish on. There’s another one that’s poised to become the “next Bitcoin.” It runs on a new blockchain — a “blockchain for everything” — created by a former Bitcoin programmer.  And major tech titans IBM, Samsung, and Microsoft have bought in (Microsoft “greenlighted” millions of developers to work on it).

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

What’s keeping Cryptocurrencies from mass adoption? — Part 2

 

What’s keeping Cryptocurrencies from mass adoption? — Part 2

Official Local Exchanges

Having to look other users in the eye can make a world of difference. Face-to-face exchanges at trusted locations means that the sale of a coin can be more easily limited, and this can act as a throttle to gauge demand. People on the “front lines,” seeing the real demand for the coin in person, can then vote to increase the price. Having stable locations to exchange the currency also creates consistency. It removes the guessing game of wondering where you can buy and sell your coin.

The advantages are not just purely economic, either. Cryptocurrencies don’t exactly have the best reputation thanks to their penchant for attracting unscrupulous people. Unethical or illegal businesses will tend to be voted out of cooperative networks with face-to-face exchanges, however, which can go a long way towards legitimizing the currency. It would still be possible to run such enterprises of course, but they would never be part of the co-op.

Local Exchange Dominance

This kind of approach can only work if there are dramatically more local exchanges than online exchanges. It would mean that the local exchanges would dictate the pricing of the currency.

Marketing Early Can Be Disastrous

Marketing is a powerful force, and as such it needs to be handled with care. On the one hand, founders naturally want to attract investment early on. This will raise the price of the coin and help pay for infrastructure, as well as boost the growth of the coin. On the other hand, historically the earliest investors in cryptocurrency have been extremely low quality—they are the speculators who doom the currency in the long run and scare away mainstream users.

With speculation, capital infusion is needed to keep the currency stable, which can be a significant task. Take Bitcoin for instance: With a market cap of roughly $20 billion, it would need a huge amount of capital to have a stable floor.

low and Steady Wins the Race

Cryptocurrencies are still in their infancy, and it’s hard to tell where the path for most of the major currencies is headed. What is the “finish line” that they are aiming for? What will the end game be?

Most cryptocurrencies have little direction besides the whims of the market, so there’s no telling where they will end up. However, there are a handful of interesting coins that have invested in strategies that nudge them in a specific direction.

The Central App Coin Method

This is a strategy that is centered around creating value with unique products and services that are associated with the currency. In this way, you could say that the currency is backed by something that people actually want.

For example, the MaidSafe network incentivizes users to provide something of value to the network (storage space), and offers the use of apps and services in return for coins. This naturally leads to better cooperation. People want to create value and channel their efforts towards the growth of the currency that they have in common.

The Setup and Switch Metho

Similar to the central app strategy, this method establishes a user base first, and then introduces the currency. Bitshares and its array of associated startups is a good example of this. Several networks with varying currencies—Steemit and their STEEM currency, Peerplays and their tokens, for instance—slowly built their user base and value exchange system, and now they plan to adopt a central currency with Bitshares. This allows them to create a stable base first before pooling their resources.

The Grassroots Movement

Finally, the best way for a currency to create that all-important foundation of true users is through bootstrapping. Just like a business startup, a currency like this would need a user base that believed in a common mission. It would need everyone in the system to be able to see the inherent value of the coin, and to understand that it could be worth much more than the value it is traded for in its early stages.

An example of one of these grassroots efforts is FairCoin. It’s a currency established and led by FairCoop, whose strategy is to build an ecosystem where businesses cooperate to give users maximum value. It is a currency built from the ground up to incentivize the long-term interests of users instead of their short-term greed—not just because it’s the right thing to do, but because it makes sense.

FairCoin focused from the beginning on building infrastructure for everyday users. Because of the strong relationships among members of the co-op, they can have thousands of ATM’s, debit cards, and exchanges that make mass adoption much easier.

An approach like this allows the currency to slowly build itself in the background without the need for a spotlight and the barrage of speculators that come with it. This offers the huge advantage of stability from the very beginning, though it does pose the problem that FairCoin has to bootstrap with less capital than most coins. Unlike other cryptocurrencies, they can’t rely on CoinMarketCap to sing their praises by displaying artificially rising prices (the effects of speculation).

In other words, FairCoin traded the excitement of volatility and greed for a quiet, long-term stability. The only problem is that people might not notice! Drama catches the human eye, after all.

Hard Forks

Let’s take a look at the hard fork that looms in the horizon for Bitcoin. As if things weren’t complicated enough, now there could be two competing chains for the currency. There are already many technical barriers to Bitcoin’s adoption among mainstream users, and this is yet another one. This makes the price even more uncertain, and uncertainty is like poison for a currency.

On the other hand, if you have a large community and a co-op on top of an immutable blockchain, then a hard fork is extremely unlikely—and unnecessary. Cryptocurrencies like MaidSafe, Bitshares, and FairCoin all represent solid communities that are incentivized to cooperate instead of speculate. This means that the coin can be worth more than its market price; it has a high inherent value within the system itself.

This makes it so that users have very little reason to defect from the existing community. A hard fork would mean giving up many benefits of the co-op, so people stay loyal to the original vision of the currency. When something deeper than just greed ties a community, hard forks don’t occur as often.

Conclusion

Stable prices don’t just happen by accident. They are not a miracle of the market—they require a carefully constructed foundation. A stable currency needs a stable ecosystem first.

While it’s tempting to market the currency too soon because capital injection can do a lot to raise prices in those critical early periods, it’s better to wait. Advertising is like opening up Pandora’s box and inviting the world to look inside. Some of those users will be interested in the actual currency, but others will be undesirable speculators that just leech off the system. For a currency to be stable, it needs to be used by “the 99%,” not just a handful of investors.

A currency needs to grow with the people, not past them. Look at the state of Bitcoin and its inflated prices. The everyday person can no longer either mine the coin or expect to use the coin in everyday transactions without high fees or risk. It has been given up to the speculators.

With a truly stable currency, on the other hand, you can have currency conversion, remittance, ATM withdrawals, and other financial services with lower fees than fiat systems. In other words, it can be used as intended—as money. This is what will ultimately attract a mainstream audience and will actually incentivize them to make the switch to cryptocurrency.

David Ogden
Entrepreneur

Alan Zibluk Markethive Founding Member

SEO Made Simple: A Step-by-Step Guide

SEO Made Simple:
A Step-by-Step Guide

  

Guess how many blog posts are published each day.

Any ideas? Over 2 million. That means 46 people have pressed publish by the time you read these 4 sentences. This makes it kinda tough to stand out. But you have to, if you want to make your blog a successful one, that is. While I often spend 4-5 hours on writing my blog posts, the 10 minutes I spend optimizing each post are easily the most important.

No wonder millions of people google the term “SEO” each month. In a world where over 90% of online experiences start with a search engine, showing up on the front page of Google can be the deciding factor between a business that’s thriving and one that’s, well, bankrupt. But what does SEO even mean? Sure, you know that it stands for search engine optimization, but what gets optimized? Is it the design? Or the writing? The links maybe? Yes, yes and yes. It’s all of them and more. But let’s start this SEO guide at the beginning.

Definition

According to Wikipedia, SEO is “the process of affecting the visibility of a website or a web page in a search engine’s unpaid results”  Alright, let’s translate that to English. Here’s my go at it: Search engine optimization (SEO) is the process of optimizing your online content, so that a search engine likes to show it as a top result for searches of a certain keyword.

Let me break that down even further: There’s you, doing the SEO, the search engine and the searcher. If you have an article about how to make vegan lasagna, you want the search engine (which, in 90% of all cases, is Google), to show it as a top result to anyone who searches for the phrase “vegan lasagna.” SEO is the magic you have to work on your article, in order to make Google very likely to include your article as one of the top results whenever someone searches for that keyword.

Overview

Now what does that magic look like and why does it even matter? 93% of online experiences begin with a search engine, 68% of which use Google to do so. Combine that with the fact that the first 5 results in Google get 67% of all clicks, and you get an idea of why search engine optimization is so important. There’s a joke going around the web that highlights how crucial it is to hit the first page of Google: If you ever need to hide a dead body, you should place it on the second page of Google search results.

Your blog post, article or product being linked on any other page of the Google search results than the first is equivalent to not being ranked at all.

But to understand how to show up first in the search engine results, you first need to know how search even works. How Search Works: Now that you have an idea of the basics of SEO, I’ll take a look at some of its components in detail. While Google guards their search algorithm pretty well and not all of the over 200 determining factors are known and verified, Backlinko did a great job of compiling as many as possible of them into one big list. But first, I need to get one thing straight. There are 2 sides of the SEO force, and you need to choose yours, right now.

White Hat vs. Black Hat

As you know, I’m playing the long-term entrepreneurial game, instead of just trying to get a quick buck out of it. It’s the same with search engine optimization. Some people are in it to make a few grand really quickly, others are in it for the long haul.

If you want to work SEO like a get-rich-quick scheme, you’ll probably end up doing what’s called black hat SEO.

This type of SEO focuses on optimizing your content only for the search engine, not considering humans at all. Since there are lots of ways to bend and break the rules to get your sites to rank high, these are a welcome way for black hat SEOs to make a few thousand dollars fast. Ultimately this approach results in spammy, crappy pages, which often get banned very fast, often leading to severe punishment for the marketer, ruining their chance of building something sustainable in the future. You might make a few grand this way but will continuously have to be on the lookout for search engine updates and come up with new ways to dodge the rules.

White hat SEO, on the other hand, is the way to build a sustainable online business.

If you do SEO this way, you’ll focus on your human audience, trying to give them the best content possible and making it easily accessible to them, by playing according to the search engine’s rules. (Inbound Marketing Inc. does a great job at explaining the difference) Needless to say, you’ll only hear and see me talking about white hat SEO. Choose your side of the force wisely, young Padawan.

Cleaning inside your house and outside: On-Page SEO vs. Off-Page SEO

There are 2 broader categories of SEO: on-page SEO and off-page SEO.  On-page SEO concerns all of Google’s ranking factors that are determined by directly looking at the page you try to optimize, such as headlines, content and page structure. Off-page SEO refers to all variables Google takes a look at, which are not exclusively in your own hands, but depend on other sources, such as social networks, other blogs in your industry and the personal history of the searcher.

They’re different, but you need to get both right, in order to do well with SEO. To give you a better idea of what that means, here’s an example:

Let’s say you have a house with a garden in the front yard, and a little pathway, that leads through your front yard to your house. Imagine these two scenarios:

Scenario #1: Your house is super clean on the inside, but your front yard is a mess.

What happens in this scenario? Well, even if you have the cleanest Mary Poppins-style looking house on the inside, if your garden looks like the forest from Sleeping Beauty, no one will come in in the first place.It’s the same if your page is super optimized around on-page SEO, has great content and looks stunning, but no one gives you credit for it or points to your page. No one will ever see your beautiful masterpiece, because you won’t get any traffic. What about the other way around?

Scenario #2: Your front lawn is neatly trimmed, but inside your house is a mess.

Turn things around and they look similar: Having a neatly mowed lawn will attract plenty of people to come visit your house, but if your living room reminds your guests of a war zone, they’ll leave quicker than you can pronounce SEO. When a visitor leaves your site after viewing only one page, in Google’s eyes that visitor is considered as a bounce. The higher your bounce rate (=number of visitors who leave your site instantly), the worse your page will rank in Google.

That’s why you need to do both on-page SEO and off-page SEO.

You can do several things on your page to get the former right and then even more things outside of that (off the page if you will) to ace the latter. We’ll take a look at on-page SEO first.

On-Page SEO

There are big categories in on-page SEO, that you’ll need to take a look at. The first and most important, is content.

Content

You’ve probably heard it before: “Content is king.” Bill Gates made this prediction in 1996 and it’s as true as ever today.

(here’s the original article by Bill Gates)

Why? Because a Google search engine customer is happy when he finds the result that serves his needs in the best way.

When you Google “quick and easy homemade mac and cheese,” Google will put all its energy into delivering to you what Google believes is the best recipe for homemade mac and cheese (that takes little time and uses few ingredients) on the entire web. It doesn’t look for the quickest recipe, the easiest recipe, or throw out a bunch of online shops for frozen dinners. Google always tries to give you the best possible experience by directing you to the greatest content it can find.

This means your number one job, to do well with SEO, is to produce great content. Bummer, right? You still have to put in a ton of work. SEO is no different than any other skill — the great results will always come from big effort. Just like the best marketing in the world won’t help you sell a bad product, super advanced SEO will be useless if you’re content plain sucks. Here are the factors that make up great content in Google’s eyes:

Quality

While the times where just delivering the best quality content would make you stand out from the crowd are long gone, it is still the starting point for any successful SEO effort (and online business, really). But coming up with great content is not easy, after all, it means you have to become a teacher and a good one at that. Yet, you don’t have to start from scratch. Okdork has published a great guide on how to create great content by piggybacking on what others have done.

Maybe you have your own ideas already, then it might be worth to brainstorm for a while and then come up with a compelling headline to start out with. Once you start writing, make sure you include all the important ingredients of great content in your blog post. Even if you’re a complete newbie, you can always take a professional approach to great content by simply committing to making writing a daily habit and work your way up in increments from there.

Keyword research

Doing your keyword research up front is a crucial part of great content. Since you ideally want to include your targeted keyword in your post’s headline and throughout the article, you need to choose your keyword before starting to write. I’ve covered keyword research extensively on Quicksprout, but if you’ve never done keyword research before, you might want to take a look at Hubspot’s guide for beginners.

Out of all on-page SEO factors, this is the one you should spend the most time learning. You don’t even need to buy a book, Backlinko’s definitive guide to keyword research will do. When I say don’t sleep on this, I mean it. There’s a reason we took the time to compile the top 40 posts on keyword research on KISSmetrics.

Use of keywords

Google has gotten smarter over the years. While you should, of course, use your keyword throughout your content, jamming your keyword into your text as much as possible will hurt your rankings, rather than improve them. Keyword stuffing is an absolute no-go these days.

In 2015, the use of keywords is much more about semantics. Google has gotten so good at interpreting the meaning of the keywords that searchers use, it’s creepy. It not only looks at your keyword but also synonyms of it, to understand what you mean when you type in, say “five guys nyc”. Google will know that you’re probably not looking for 5 random males, but rather guesses that you’re looking for the fast food chain “Five Guys, Burgers & Fries” by looking at similar searches that may include the keywords “burgers” and “fries.”

As long as you make sure your keyword is present in strategically important places (like headlines, URL and meta description), there is no need to mention it tons of times in your text. Just focus on the reader and seamlessly integrate your keyword a few times.

Freshness of content

Hubspot has done a benchmark this year that showed, once again, that posting more frequently improves Google rankings. However, posting new content is only one way to signal Google freshness. There are plenty of things that you can do with already published content to make it more up-to-date. Brian Dean from Backlinko, for example, has only published around 30 posts in 2 years. Yet, he keeps all of his posts up to date by rewriting them and adding new information as he finds it. While it is important to publish regularly, you can still get great results with posting once a month, as long as your content is thorough and in-depth.

Direct answers

Finally, one of the more recent updates provides searchers with direct answers. If your content is written clearly enough for Google to recognize it as an answer to a particular question, it will show up directly beneath the search bar. Matt Cutts, former head of Google’s spam team and often public voice for the latest in SEO and algorithm changes, announced last year that people who were cutting the jargon would be right on track.

That’s why detailed guides and long how-to’s  have become more and more popular. So make sure you clear up your writing, fancy buzzwords and complex sentence constructions will neither make you sound smart nor help your SEO game. Moz has listed out all critical aspects you have to keep in mind, if you want to do well with direct answers.

HTML

The next big chunk you have to take care of, once you’ve made sure your content is evergreen, is HTML. You don’t have to be a professional coder or get a degree in programming by any means.  But, running an online business without knowing the basics of HTML would be the same as driving without knowing what the colors of traffic lights mean.

Thankfully, with places like Codecademy or Khan Academy, there are more than enough possibilities to learn everything about HTML that you need in the blink of an eye and for free. Heck, you can even learn it on the job, by just using a simple cheat sheet, like this one. Let’s take a look at the 4 parts of HTML you should optimize for each and every single piece of content you produce.

Title tags

Title tags are the online equivalent of newspaper headlines. They are what shows up in the tab of your browser when you open a new page. The HTML tag used for them is called title, but in the case of blogs, it often becomes an h1-tag, which stands for the heading of the first order. Every page should only have one h1-tag to make the title clear to Google. We’ve shown you how to do this at Quicksprout University, but the website First Page Sage has compiled a few more things that you can do to get these right.

Meta description

Meta descriptions are what shows up as an excerpt when Google displays your page as a result to searchers. It’s easy to spot who’s done their SEO homework and who hasn’t by the meta description. Optimized meta description results will never be cut off and end with “…” or seem like they end mid-sentence. They also often mention their keyword up front. You can learn how to come up with great meta tags in Quicksprout University, and should also check out some good examples to get a feel for descriptions. Don’t overthink this 160 character text snippet though. When writing it, you should keep the searchers in mind, much more so than the search engines.

Schema

Schema is the result of a collaboration of several search engines and is basically just a subset of specific HTML tags, which will improve the way your content is displayed on the search engine result pages (also called SERPs). The rating from the above example with Bitcoin was created using Schema, for example. It’s a rather small factor, but definitely good practice. Moz has some good tips on how to get the most out of Schema. When you’re done, don’t forget to test your page to make sure everything runs smoothly.

Subheads

I’ve previously identified subheads as one of the 7 things every great landing page needs. Not only do they help format and structure your content and give your readers easy reference points, but they also affect SEO. Compared to your h1-tags, h2, h3, h4 and further subheads have less SEO power, but still, matter and should therefore, be used. Plus it’s one of the easiest SEO wins you can get in WordPress.

3. Architecture

The third and last part of on-page SEO, that I’ll cover, is site architecture. While this part gets super-techy, super fast, there are a few simple things everyone can and should take care of, to improve SEO rankings. A good website architecture leads to a great experience for the user when he navigates your page, through things such as fast loading times, a safe connection and a mobile-friendly design.

Ideally, you’ll map out the architecture of your site before even buying the domain, which allows you to really get into the head of your user and reverse engineer your way to a great user experience (UX). ConversionXL has published a great guide on how to make sure your UX rocks. You also need to optimize a few things in order for a great “search engine experience.” The more accessible your website is to Google, the better it will rank.

Easy to crawl

Remember the spiders from the introductory video? These are the programs that “crawl” from one page on your site to the next through links. Depending on how well they can index all the pages on your site, they’ll be more likely to report back to Google that you are a good result. The thicker the web of links between pages of your site, the easier it is for the spiders to reach all of them, giving the search engine a better understanding of your site. You can make this job easier for Google by creating a sitemap, using a simple plugin if you’re on WordPress or an online XML sitemap generator.

Duplicate content

There are a lot of myths ranking around duplicate content, and how it hurts your rankings. A common mistake is to think everything on your page should be original. Re-posting your content on other websites or publishing your guest posts again on your own site, doesn’t hurt your SEO, unless you do it the wrong (spammy) way. For example, if you re-post your exact same content to a big outlet like Medium, it might hurt your rankings, because Google indexes your Medium article first, as it’s on the more authoritative domain. In order to make sure you don’t get penalized, educate yourself about 301 redirects, which are a great way to handle duplicate content. I’ve also put together a guide to show you how to address the issue with rel=canonical tags for links on Quicksprout.

Mobile-friendliness

Let’s face it, if your page isn’t mobile-friendly, you lost. Consider this: Over 500 million Facebook users (that’s half a billion, just for clarity) ONLY uses facebook through their mobile phone on a daily basis. While there are several ways to make your page mobile-friendly, I recommend you start by checking with Google’s tool how you hold up right now. Most WordPress themes are mobile-friendly from the get go these days, and if not, you can always install a plugin to take care of it. You can also just implement Google’s suggestions from the tool yourself or hire someone to make the changes.

Page speed

Don’t fool yourself, you know just how important this is. Remember how angry you were the last time the wifi took 20 seconds to load a page? Today, we value our time more than anything, and long loading times can absolutely kill your conversions. Again, Google has a tool to easily test this. Another way to see if you’re doing okay is to use this free test by Pingdom. ConversionXL has identified a few low hanging fruits for increasing your website speed and at Crazy Egg we show you how to squeeze out that extra second to improve your user experience.

Keywords in URLs

Including your targeted keywords in the URLs of your blog posts is a can’t miss. You shouldn’t squander those SEO points. You might have to change the structure of your permalinks on WordPress, and should certainly keep your human users in mind, but including your keyword in your URLs is a no brainer.

HTTPS and SSL

Google announced that security is now considered a ranking signal. There are two common security protocols: HTTPS (a secure version of HTTP) and SSL (Secure Socket Layer). Both of the works and are worth considering, even if they won’t up your SEO game too much. Moving from a non-secure connection to HTTPS or SSL is a bit of work, but worth your time. If you’re starting out with a new domain, consider purchasing it as an option from your domain registrar or web hosting service. Pro tip:  You can save a lot of on-page SEO by using a tool.  For example, if your blog is a WordPress site, Yoast SEO will help you with many of the important on-page elements we just discussed.

Off-Page SEO

Alright, time to step outside your house and take a look at the front yard. I’ll now show you 4 big areas of off-page SEO. If you want a solid overview on one page, consider looking at Shane Barker’s great infographic.

Trust

PageRank, the famous formula invented by the founders of Google is by far not the only measure they take when ranking pages in the top 10 search results. Trust is getting increasingly important and most of the recent Google updates have hit spammy and obscure websites. Trustrank is a way for Google to see whether your site is legit or not. If you look like a big brand, Google is likely to trust you, for example. Quality backlinks from authoritative sites (like .edu or .gov domains), also help. There are 4 parts to building trust.

Authority

The overall authority of your site is determined by a mix of 2 kinds of authority you can build:

  • Domain authority, which has to do with how well known your domain name is (coca-cola.com is very authoritative, for example), and
  • Page authority, which relates to how authoritative the content of a single page (for example a blog post) is.

You can check your authority here, based on a scale of 1 to 100. To improve your authority, use the cheat sheet I that came up with to increase your authority without cheating.

Bounce rate

Your bounce rate is simply a measure of how many people view only one page on your site, before immediately leaving again. Content, loading times, usability and attracting the right readers are all part of decreasing your bounce rate.  The math is simple- the right readers will spend more time on a site that loads fast, looks good and has great content, right? Video is another great way to do so, but you need your video content to stand out and deliver (Buffer’s 5-step process is a great place to get started with video).

Domain age

Remember the times before young entrepreneurs like me were all the hype? Who were the most respected businessmen around?

The old guys. The Jack Welchs and Warren Buffetts of the world.

With domains on the internet,

it’s similar. Domain age matters, if only a little. If you haven’t got your site up and running yet, consider finding an affordable, expired domain and using it.

Identity

As mentioned above, having a brand or personal identity online is a huge trust signal for search engines, but it takes time to build. You know you’re a brand when you google yourself and something like this pops up. You don’t have to have a brand name, creating your personal brand works just as well. What’s more, building brand signals prevents you from future penalties through Google updates.

2. Links

Just by how far you’re into this search engine optimization guide already shows you that the common conception of “backlinks are everything” is just wrong. hey’re only a part of SEO, just like all the other areas I covered already. There are plenty of ways to get backlinks. But, no matter what you do, don’t just wait for people to link to you, that’s a fool’s game, you’re going to have to take initiative and ask for them. Consider these factors when trying to get backlinks:

Quality of links

While links are not everything, when looking at links, their quality is everything. The quality of your links matters much more than the amount of links you have. Building quality backlinks is all about reaching out to the right sources and offering value in exchange for a solid link, and I show you tons of ways in our advanced guide to link building.

Anchor text

The anchor text is the text used when other sites link to you and yes, it matters. Differentiating between the types of anchor text is part of the nitty gritty, but a good rule of thumb is:

The more natural the link text sounds, the better.

Here’s an example: You could either link to a guide on anchor text best practices by linking the word “click here” or just naturally mentioning it in the flow of your writing. The second category is called contextual backlinks, and that’s the one you should strive for.

Number of links

Lastly, the number of total links you have does of course matter as well, and you need to over time build high quality backlinks at scale.

Personal

The third category of off-page SEO, that’s worth taking a look at, is personal factors. While most of these are out of your control, there are a few things you can do to increase your chances of reaching a certain audience.

Country

All searchers are shown results relevant to the country they’re in. Open times of recommended stores and restaurants are displayed in your time zone.

(Country — it’s all about where you’re from)

Words are interpreted differently. Someone searching for “comforter” in the US will be displayed blankets for their bed, whereas someone in the UK might see pacifiers because that’s what the term means there. A way to signal Google that you want to target certain countries is of course including them as keywords, but definitely, ask yourself is it worth it to go multinational.

City

The geo-targeting goes even further, down to a city-level. That’s why, when you google any fast food chain, you are usually shown results from right around the block. Again, using city names as keywords helps, but don’t paint yourself into a corner or you’ll end up being considered as a local authority only.

Searcher’s history

If the searcher has been on the same page before or even just visited your site in general, you’re more likely to show up, because Google thinks you’re a relevant result for the searcher.

Socialization

Do you have a YouTube channel or a Google Plus profile for your brand? If so, the more people like you, the better. When google recognizes that you’ve signaled you like a brand on social networks, it’s more likely to show you results from those brands or even personal contacts you have.

Social

Lastly, let’s take a look at the social factors of off-page SEO. Besides social signals directly from the searcher, there are other ways good results on social media will help you rank better. Whether that’s directly through more links, or indirectly through a PR boost, social matters. I’ve done several case studies on Quicksprout, proving social media is well worth your time.

There are 2 main factors of influence.

Quality of shares

As with the quality of backlinks, who shares matters more than how often. Google recognizes influencers and when they share your content that share has more SEO juice than your neighbor’s. A great way to get influencers to share your content is to give them a heads up before you even publish, or still better, include them by quoting or interviewing them. Of course, you should also tell plenty of online celebrities who are already interested in your topic. You can find a similar article (maybe one you fund one during your research), plug it into a tool called Topsy, and find influencers who shared it. Then let them know you published a new piece on the same topic.

Number of shares

The secondary social metric is the number of shares. Landing a viral hit is every marketer’s dream, but it is overrated. Okdork’s guide on what it takes for an article to go viral gives you a few ideas what to optimize, but know that “going viral” is mostly a matter of consistently publishing great content. Oh, and promoting your blog post like crazy.

Conclusion

I hope this guide helped you realize that in 2017, search engine optimization isn’t optional anymore. While it doesn’t take a lot of effort to get a few basics right, it might kill your online presence if you don’t. Don’t worry if you’ve already made some SEO decisions in the past that might not have been the perfect choice. Just commit to getting started today. Do your keyword research before you write your next blog post and optimize the basics, like title tags, using your keywords and adjusting your description. And who knows — maybe the next time you press publish, you’ll stand out. After reading this guide, how will you change your attitude towards SEO?

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

Facebook now lets businesses match user IDs across Messenger and their own apps, sites

Facebook now lets businesses
match user IDs across Messenger
and their own apps, sites

Facebook previously gave businesses one ID when someone contacted them on Messenger and another when that person logged into their apps or sites.

   A A boring story made interesting:

If you contact a brand through Facebook Messenger and also log into the brand’s mobile app using your Facebook account, the brand has no idea that you’re the same person. Or it had no idea — until now.

On Tuesday, Facebook made it possible for businesses to match the ID it creates when people interact with a business’s Messenger account with the separate ID it creates when people log into the business’s app or website using their Facebook account. The full details about how businesses can do this matching can be found here on Facebook’s site for developers.

As a result of this matching, a brand can use the information it gathers about a person through its mobile app, such as past purchases, when it communicates with that person on Messenger, such as when deciding to notify someone about a new product. And if a business operates multiple apps and sites or owns multiple Facebook Pages, it can match a person across all those places, assuming the person logged in via Facebook to those other apps and sites or contacted those other Pages on Messenger.

By unifying these IDs, marketers are also able to take into account people’s interactions across Messenger and their own apps and/or sites when targeting ads. Consider the earlier example of someone who contacted a business on Messenger and logged into its app. Now that the brand knows not only that the person purchased a product on its app but had also voiced an issue with it on Messenger, the brand could look for other customers who fit the bill and group the Facebook-related IDs it has for those users into a list to target them with discount-waving, win-you-back ads using Facebook’s Custom Audiences ad targeting option.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member

The Evolving Role of Social Media in eCommerce

The Evolving Role of Social Media
in
eCommerce

Private messaging is emerging to reach your market 24/7.

   The Evolving Role of Social Media in Ecommerce

The Evolving Role of Social Media in Ecommerce

As social media and eCommerce become increasingly enmeshed in our lives, the opportunities for them to interact with and bolster each other are innumerable, considering that the average person spends around an hour and 40 minutes browsing social media every day, and the number of internet shoppers in the US will reach 217 million this year.

Back in the old days, a business’s presence would be signified by advertisements in the paper and a physical storefront. Now, in the digital age, business reputations live and die by their social media standing. Right now, social media is used by brands as a way to advertise, increase their online presence, and deliver high-quality customer service. In 2017, we can expect those trends to continue, as some new ones emerge. Let’s take a look at the growing role of social media in eCommerce.

Paid advertisements.

With the almost absurd level of customization you can put on a Facebook ad (age, geography, preferences and more) and the detail with which Facebook can report your results, it’s a no-brainer for brands to keep using Facebook and other social media advertising. It’s also a win for Facebook, which raked in more than $7 billion in advertising in 2016.

The most successful brands in 2017 will be those able to maximize their reach and effectiveness on paid social media advertising. William Harris, an eCommerce growth consultant for elumynt.com, says, “I see eCommerce brands investing a lot more in paid social, and I think that trend will continue into 2017…it’s not enough to simply pay for ads on Google Shopping. You’ve got to find a good audience on Facebook ads, Instagram ads and more and more, on Pinterest and other paid social media accounts. It’s getting easier to set these up and track the return on advertising, which means more brands will start doing it.”

Private messaging.

Over the past few years, analysts have noticed an interesting, unexpected trend. While the use of public social media networks such as Facebook and Twitter is starting to decline, private messaging services are exploding in popularity. WhatsApp, Snapchat, and Facebook Messenger are all app juggernauts with colossal engagement numbers running into the billions. Where the people go, the businesses must follow, and brands are edging their way into private messaging through chatbots. Chatbots, AI personalities that can simulate real conversations, can answer questions on products, offer recommendations, and resolve customer complaints.

Consumers are slowly warming to the idea. According to Venturebeat.com, 49.4 percent of customers would rather contact a business through a 24/7 messaging service than through the phone. Brands would be prescient to start looking into catboat services as a supplementary channel to reach customers. Additionally, many private messaging services now offer financial integration. Opening up WeChat, chatting with a brand AI representative, and purchasing a product without closing the app once, is entirely within the realm of possibility in 2017.

In-app purchasing.

The harder it is to buy or access something, the less likely we are to follow through. This explains why eCommerce sites that take a long time to load have higher bounce rates, and online stores with clunky interfaces sell less. One can already buy products through Instagram, Pinterest, and Twitter. Once Apple Pay experiences widespread adoption, it’s almost scary to think about how easy impulse buys will be — if you see something you like on social media, one swipe will get it delivered to your door. Brands should immediately start evaluating how they can sell their products through social networks, coupling a strong advertising presence with an easy purchasing process.

What's coming.?

This year, social media will not only play a big part in eCommerce but also in all aspects of our social life, just as it has been, arguably, for the last several years. Moreover, several new social network technologies, including powerful advertising tools, chatbots, and in-app purchasing, as well as improved design, will make eCommerce easier, and bigger, than ever.

Chuck Reynolds
Contributor

Alan Zibluk Markethive Founding Member