Topic: Centralised Exchanges are the Biggest Enemies of Bitcoin - page 2. (Read 410 times)

I think the best conditions is when people can choose what to use. If someone wants a custodial wallet, being aware of the 'not your keys, not our coins' rule but trusting the company more than oneself, it's fine. If someone wants to use centralized reputable exchanges like Binance, feeling sure that everything will be done well there, and even if a hack happens, the company would compensate its users, it's also okay. And it's possible to use non-custodial wallets and decentralized exchanges. I think that the freedom is the freedom to choose. And right now, when Binance is acting in a bank-like manner and imposing state sanctions on Russia, I appreciate it. It's important to have centralized institutions after all, to punish those putting others to harm, serious harm. As for taxes, op, they're also used for free education and medicine (for many in my country), roads and cheap public transport, etc. So I support the idea of more decentralized initiatives and alternatives, but I think that it's fine that centralized ones exist as well.

As long as decentralized exchanges do not become popular, we have no option but to trade in centralized exchanges and follow their rules and regulation.
It is impossible to access the centralized exchanges without KYC.

What you say is the absolute truth about how Bitcoin purpose is to protect individual freedom in managing finances. But we can't if the policies in the country of residence and the large diversity of users choose to take a centralized exchange path. There will be taxes, KYC monitoring and much more, so the definition and purpose of Bitcoin becomes difficult if we are not in El Salvador where 90% of the government is pro Bitcoin and its adoption. Therefore, it is highly expected that the individual's attachment to government policies will inevitably follow, by allowing access to Bitcoin. What you convey is really the concept of an ideal goal as Bitcoin was created, which is to break away from the bondage of rules and prioritize financial freedom kaffah.

I believe in the premise of bitcoin, I'm pro bitcoin, but it's not these companies that "kill" the original idea of ​​bitcoin, it's the users, it's us, the technological tool is already there, but we've misused it.

Let's not look to third parties to blame, we are more than them (these exchange owners), but we don't organize ourselves, we don't trust ourselves, trust is one of the main tools that brought bitcoin to the position it has today.

Let's start with something...let's push a massive withdrawal of money from traditional banks, let's start withdrawing bitcoin from centralized exchanges and trust the concept of "decentralization"...such a thing is not possible today, but I don't lose hope hope that in the maturing of the ideal of that basic premise "financial freedom" we will reach at least a balance between those who think that this right exists and between those who want to remain dominated, by the way, and include a third group that will surely always want to exist in those two incomprehensible sides "freedom and not freedom".

I can understand the disappointment of the OP but this is the sad reality that we need to accept. These centralized exchanges, if they are operating legally, need to be under the jurisdiction of the government to get their license to operate. And with the license comes with the abiding of the laws and regulations, hence, requiring KYC from all their customers. But to increase adoption, we need CEXs, as many people are confident on using these trading platforms. Aside from that, they can find important coins to trade in CEXs, whereas, in DEXs, the tokens are limited.

Decentralized exchanges are only good for casually exchanging small amounts, not for professional trading and big operations. DEXes still rely on traditional financial system for fiat payments, there's no way around it. So, without centralized exchanges Bitcoin market and price discovery simply won't exist.

I understand ehat you are trying point out but as of now, CEX are needed for adoption. Not all people want revolution, they just want to trade and earn, because exchanges offer a lot and absolutely effective to what most people want today. Look how hey work it out, offering them extra income, staling their coins just a few days and boom, they could earn. So many opportunities unlike decentralized exchange. Only a time when the people don't want to use fiat anymore, or the value of fiat is totally useless. And I think we are somehow getting nearer to that, look at your surroundings, the world is the brink of destruction. Do you think a centralized money is needed on that day? Well that's just my opinion and nothing more.

Except risking your identity being stolen and all your coins being stolen, scammed, hacked, locked, frozen, etc.

Irrelevant. You don't need to be doing anything illegal to want to maintain a little bit financial independence and privacy from the prying eyes and fingers of centralized exchanges.

Sure, but it's also about trading peer-to-peer and avoiding financial institutions, which is obviously lost if you use a centralized exchange.

The approach that OP presents us is given by the relationship that the CEX must have in order to operate. Many don't like CEX because they have to provide their information through KYC/ALM.

I am not against the CEX, on the contrary, I feel safe using their platforms. In fact I learned how to use bitcoin and cryptocurrencies through it and it was the best experience of my life.

If people don't like CEX today there are alternatives like DEXs and a range of opportunities with DeFi.

Since the creation of bitcoin, many things have changed, our ecosystem has grown exponentially trying to follow the ideas of offering us the freedom for which we believe in bitcoin.

Is it really the CEXs that force you to pay TAX on gains or your Country? I thought those were fees on trades I believe that traders should know better now not to keep hodling their crypto bags on CEXs, so that they can reduce all these issues of wallet freezing and as for preventing their services to some location, I know some inline stores do that too like they don't ship to your country so not all regions will enjoy every service by some organization or Business.

I agree that there might be no problem using CEX but storing your Bitcoin on it will create a problem. Some of us are against of using CEX because it might actually be killing the liberty of having a BTC on your own but it's a people's choice why CEX are getting popular these days. DEX on the other hand might be striving each day to survive but they still remains strong since there are still people who believe in them and is actually using it until these days.

I think it's not the CEX is the problem here since if we use Bitcoin and at the same time exchange it with fiat then it's just right that they should follow the government rules or they will lose their business.

Yes, but there's nothing in this world that can be forever free or give liberty especially when the institutional investor joins the ecosystem and I think we should be ready for what may happen in the future either cause the institutional investor are buying Bitcoin more than we could imagine.

Coinbase is the worse among the listed exchange because they have proved to be the worse exchange by following the SEC regulation before every other exchange site implement it.

In this situation, the best thing to do is ignore the exchange site that has regulation policies, and use the alternatives. However, I don't blame the big CEX because they are CEX, not DEX, and the last time I check the Bitcoin Foundation and community are to blame for this because Theymos once raised the issue of Elizabeth T which says "The Bitcoin Foundation needs to be prepared and ready to expand in areas of key importance should matter arise such as increased government regulation and a crackdown on Bitcoin related businesses and users.  While increased government regulation is still a potentiality and not necessarily a reality yet, the foundation still needs to work to find a balance between proactivity and preparation for what lies ahead as the currency still grows in prominence.  The Foundation again should work to develop tools and guidance for the Bitcoin community to have on hand should lobbying efforts to need to be carried out in the future. "
But not tangle thing was done


The worse is yet to come mate after the institution has understood the benefit of Bitcoin and dominating the market.

There is no problem using CEX even when they are asking KYC and some other stuff that is really not necessary. There is no escape anymore when you have already sent your documents to one of the exchanges. You send to one, it means you are documented. Using BTC is not a crime though.

Not sure if the ideology of BTC is all just about freedom and liberty. After having some BTC for the first time, I felt like I'm not unbanked anymore, this alone does feel freedom to me.

Exchanges are tools used to trade cryptocurrencies, it does not directly make bitcoin popular or reach more users, rather it is the userbase that makes the exchanges popular. If more people moved over to using decentralized exchanges then it would become as popular and would be said to reach more people.
Centralized exchanges act as intermediate, so trading on such platforms is not really peer to peer or decentralized as bitcoin was meant to be.

I don't think CEX is the big enemy of bitcoin but on the contrary, CEX also helps the development of bitcoin to reach more users. The exchange will promote its website to many places to come and join them. When people join, they see there is bitcoin, where bitcoin has an up and down price that they can use to make a profit.

Before bitcoin was popular, centralized exchanges were not as strict as today. As I recall, in the past, at Poloniex, we only needed to register using our email, name, address, and phone number (if I am not mistaken). But after Poloniex became popular, the site made an option for its members to increase their level to level 3 but they need to re-verify. It also happens on other centralized exchange sites because now, the government has tried to intervene and maybe they are pressuring centralized exchanges so that their members do more detailed verification.

my gripe with centralised exchanges, is like this
binance has in its terms that it cant serve american/canadian customers.
its HQ is in asia. but its markets revolve around the USD

what exchanges should do is not be so (excuse pun) tethered to the dollar. and instead have separate market order books for different fiat currencies, whereby the markets dont oscillate(move back and forth in a pattern) as a sheep to USD value

for instance OTC/ private exchanges that only operate in asian markets should be at a premium or discount to other markets based on USD.
where the value doesnt peg to USD

 look how sheepish the markets are


again binance does not 'supposedly' service US/canadian customers yet it sheep follows US exchanges.. not closely. but EXACTLY like for like
https://www.binance.com/en/terms

this mimicry is too close to be a fluke. after all people in say asia/europe should have different sentiments and trading patterns than say traders in the US.
the reason the markets look the exact same is not from different sentiments of different traders on different markets, but on the central exchanges arbitraging each other to stay on par with each other, rather then letting their customers just play the orders the customers want to play, with their own separate sentiments in different markets

majority of the market place is still preferring to use FIAT to get goods and services. Good and services -value and prices like it or not are based on FIAT. not Bitcoin
sure you can use Bitcoin to pay for some goods and services now. However the you are still in the circle of fiat .

Prices are not based on Bitcoin at all.
Therefore it makes more sense to use FIAT.
Bitcoin is just a store of value. that is how the market is taking this.

I am not saying that CEXs are the biggest “enemies” or “threats” to BTC. It’s just that they have no choice but to comply with the regulatory requirements of a certain country in order for it to operate and become available to those customers (especially sanctions).

I only use CEXs to convert my cryptocurrencies and transfer it to a custodial wallet where I can withdraw it straight to either bank or mobile payment provider. But it’s not a good idea to make CEXs as a storage source if we want to hold BTC or any cryptocurrency.

exchanges dont 'freeze' accounts at a whim. because people can sue businesses that breach certain standards.
yes exchanges can put terms and services for how customers should act while using the service which then gives reason to freeze an account if certain acts are against the business policy or regulation. (so people should read terms and conditions)
yes they can put temporary 'server overload' or 'down for maintenance' pages up but they cant freeze an account at a whim temporarily without reason

as for manipulating. well thats insider trading, which comes with investigations and fines. which is why they wont do it for silly small amounts of only a few customers balance level. it would need to be whole market value amounts to make the risk of fine be worth the possible profit.

it was easily possible 10 years ago to play the markets but these days, they earn enough just servicing customers to not need to also be angering the customers by stopping customers.
yes they can arbitrage their reserves to other exchanges miliseconds before a customer on their market causes a spike or crash. but they cant just play around with your own customers on their own market

EG exchange A sees a potential $1k spike/dip on exchange A by a customer, so exchange A uses its reserves on exchange B to copy that order in milliseconds, thus making exchange B mimic exchange A. (before exchange A's customer order fills to then have that customer to then arbitrage to exchange B for a double sweep)
however exchange A cannot just halt an order of a couple customers repeatedly in exchange A without it causing a few flags of its own oversight popping up which can trigger exchange being investigated for insider trading