WHAT IS CRYPTOCURRENCY?
A cryptocurrency is a digital currency that works like a normal currency on the internet. It is a medium of exchange that uses cryptography to secure transactions.
There are a few predefined conditions that must be met, to facilitate exchange. There is a decentralized control for each currency and it works through the Distributed ledger technology. This means that there is no centralized data center. Distributed Ledger Technology is unanimity of shared, synchronized and replicated digital data spread geographically across countries, institutions, and sites. Bitcoin was the first to go out live as open-source software in 2009. It is also the first decentralized cryptocurrency.
Here are a few popular Cryptocurrencies:
- Bitcoin cash
Cryptocurrency trading can be forecasted using the data. For instance, if a user has the date of the past prices and the factors that influenced it, he/she can easily interpret the future costs, which currency to invest etc. This data can be obtained using Web scraping and is extremely beneficial for both buyers and traders.
WHAT IS WEB SCRAPING?
Web Scraping is a technique that allows its users to extract a large amount of data from the web. Data found on the web can only be viewed when online. The technique of web scraping enables us to extract large data for personal use. This data is stored as a local file in your system or as a spreadsheet. Here is a line chart that shows the interest among users for web scraping.
The process of web scraping can be done either by bots or humans. Bots are capable of performing tasks a lot faster than humans. But, using bots can also cause a lot of loss in revenue for the victims. About 37.9% of web traffic is due to bots.
HOW DOES WEB SCRAPING HELP MERCHANTS/TRADERS AND BUYERS?
Here is a quick stat on the trade volume.
Source: Screenshot of today’s trade from Bitthumb
With rising opportunities in investing, if the trader does not perform a calculated risk analysis, chances are high that he might fall back. The liability lies entirely on the trader. This is where web scraping comes to help. Crawling multiple resources for data on cryptocurrency can help the trader understand the trend and access the risk in investing.
Here are two ways of how web scraping can help:
Web scraping helps the merchants analyze and be updated on the prices of the cryptocurrencies they are trading. This solves a lot of time spent on manually checking the prices. Doing this manually involves a lot of human effort and time.
Cryptocurrency is a booming industry. The prices change daily and the merchant/trader should know when and where to invest. What started as a matter of luck has churned out to be a matter of analysis. Investing in the right time on the correct currency can reap a lot of benefits both for the buyer and the investor.
Web scraping collects this data and allows merchants to identify a pattern. This pattern is used to analyze the factors and the behaviors that have an impact on the pricing.
This would help traders/merchants forecast and predict the right time to invest in a currency that would help them in yielding good returns.
There are so many issues that can affect the prices of the cryptocurrency, for example, when South Korea announced the closure of their cryptocurrency, it had a massive impact on the trading. It caused a downfall in the exchange of information. Technological and Economical changes like IBM’s crypto banking or bankruptcy of trading companies also had a significant impact.
By having an overview of this information, merchants can keep track and predict the behavior.
HOW TO ANALYZE THE DATA OBTAINED USING WEB SCRAPING?
Before we proceed further, you should know about the tool used for this example. We have used a tool called Octoparse. Octoparse is a modern visual web data extraction software. Both experienced and inexperienced users would find it easy to use Octoparse to bulk extract information from websites, for most of scraping tasks no coding needed.
So, here is how we are going to overcome investment obstacles when using Octaparse:
First, we need to extract the data about the crypto market. We are going to perform comprehensive market analysis using this information.
Next, we are going to see how to monitor the pricing.
For the ease of understanding let us say we are looking at investing in Bitcoin. We need to know the right time to do it.
To help in identifying the trend we need some historical data. This can be obtained from CoinMarketCap.
Let us now see how to extract the information using Octoparse
- Start the extraction task with Advanced Mode. You need to provide the URL.
- Select the date of the chart. Octoparse will find similar elements. Using the Action Tip, select all the fields (which includes Open, High, Low, Close, Volume and Market Cap).
- Extract and Export the data.
Your sample chart would look something like this.
- Create an Excel Waterfall Chart using this data.
The chart will give you a clear idea on price rise and drops. A sharp rise followed by a sharp drop means that the market is volatile and it is always risky to invest when the market is like that. In such cases wait for the market to cool down and the prices to stabilize. If the price fluctuates without stabilizing, it is still not the right time to invest.
You can set up a new project for each coin and do similar research.
With Cryptocurrency having a promising future and revolutionizing payments system. Merchants and buyers need one way or the other to understand the trends and decide. Web Scraping helps them make informed decisions. It makes data available in a structural format at a single click. So, if you are a merchant or a buyer who is looking at investing, then it is high time you consider web scraping.
WEB SCRAPING AND PROXIES
Now that we have an understanding of what Web Scraping is all about and how to do them, let us see what are proxies and how they are beneficial when it comes to Web Scraping.
For this, we need a basic understanding of what an IP address is. An IP (Internet Protocol) address is a specific number that is assigned to every device which can access the Internet. This could be your computer, laptop, tablet, mobile, web servers etc. IP addresses are unique and help websites, service providers to identify who has visited their website.
A proxy is a third party server that you can use to route your request. When doing this, you will be using their servers and IP address. When using a proxy the website will no longer be able to track your original IP.
Proxy servers work as a middleman between your web scraping tool and the website. The HTTP request to any website will pass through the proxy server first and the proxy server will pass on the request to the target website. The main reason why you need a middleman proxy server is to hide your IP address from all websites so that even in the worst case you will not get blacklisted.