Now lets define first what is the meaning of Decentralized Market and Centralized Market
What is Decentralized Market?
- A decentralized market is a market structure that consists of a network of various technical devices that enable investors to create a marketplace without a centralized location. In a decentralized market, technology provides investors with access to various bid/ask prices and makes it possible for them to deal directly with other investors/dealers rather than with a given exchange.
What is Centralized Market?
- A centralized market is a financial market structure that consists of having all orders routed to one central exchange with no other competing market. The quoted prices of the various securities listed on the exchange represent the only price that is available to investors seeking to buy or sell the specific asset.
Now lets talk about the difference of Decentralized Market vs Centralized Market
- Centralized Market is controlled by a central server, while the Decentralized Market is no central server, peer-to-peer decentralized exchange protocol.
- Centralized Market is easy even for beginners, while the Decentralized Market is not user-friendly; too technical even for intermediate or advance user.
- Centralized Market offers advance trading feature, while Decentralized Market offers basic trading features.
- Centralized Market required; higher transaction fee, while Decentralized Market offers basic trading features.
- Centralized Market not anonymous, while Decentralized is anonymous.
- Centralized Market Slower; at risk for server downtimes, while faster; lesser risk for server downtimes.
- Centralized Market single point of entry; susceptible to malicious attacks, while Decentralized Market is multiple points of entry; lesser chances of malicious attack.
- Centralized Market users potentially held legally accountable if issue occur. While Decentralized is accountability is not as apparent as the code could be considered law.
Topic: Decentralized market vs. Centralized market - page 2. (Read 284 times)
Before you go in and list all the pros and cons, like others above already start, you should also take a look at what's already on offer and make comparisons from there. Some of the points aren't even possible to validate, like OP's original point about higher profitability with centralised markets (huh?).
A starting point would be the existing offerings of decentralised exchanges (DEX). We've now come to see that none of them are "purely" decentralised. After all, what's total decentralisation and how can it even be possible at this point in time? The majority of DEXs out there have only decentralized the storage of funds - meaning you still keep your Bitcoin or crypto on your wallets. That's already a great starting point since it eliminates the risk of the exchange running of with your funds.
But there are still several aspects that these DEXs have centralised. Most of them currently require you to use the blockchain they're using, so you can only trade tokens based on those platforms. The majority of DEXes therefore are Ethereum-based, since the alt token market is mainly populated with ERC20. Even the Bitcoin DEXs like Counterparty means you can only trade tokens based on Bitcoin blockchain like XCP. Other DEXs like Waves the same. So they're all existing in their centralised markets in that sense. I know DEXs in development will feature atomic swapping so theoretically any supported blockchain could interact.
Other aspects? Hosting of the software on central servers?
A starting point would be the existing offerings of decentralised exchanges (DEX). We've now come to see that none of them are "purely" decentralised. After all, what's total decentralisation and how can it even be possible at this point in time? The majority of DEXs out there have only decentralized the storage of funds - meaning you still keep your Bitcoin or crypto on your wallets. That's already a great starting point since it eliminates the risk of the exchange running of with your funds.
But there are still several aspects that these DEXs have centralised. Most of them currently require you to use the blockchain they're using, so you can only trade tokens based on those platforms. The majority of DEXes therefore are Ethereum-based, since the alt token market is mainly populated with ERC20. Even the Bitcoin DEXs like Counterparty means you can only trade tokens based on Bitcoin blockchain like XCP. Other DEXs like Waves the same. So they're all existing in their centralised markets in that sense. I know DEXs in development will feature atomic swapping so theoretically any supported blockchain could interact.
Other aspects? Hosting of the software on central servers?
I'm going to try to make a list of pros\cons on this matter. So pros of decentralized market:
1) It's not regulated by establishment rules, so pretty much everything can be found there.
2) It's usually tax free, so feel free to make as much money as possible, only you are your roadblock.
3) Your private info and identity would be pretty safe using those markets.
Cons:
1) No one really is credible enough to trust them 100%.
2) It's not "regulated" per se.
Pros of centralized markets:
1) You can say that the fact, that it is regulated, because it makes it rational and organised.
2) People usually can trust it.
Cons:
1) Monopoly.
2) It develops quite slowly.
That's the things i got from the top of my head.
1) It's not regulated by establishment rules, so pretty much everything can be found there.
2) It's usually tax free, so feel free to make as much money as possible, only you are your roadblock.
3) Your private info and identity would be pretty safe using those markets.
Cons:
1) No one really is credible enough to trust them 100%.
2) It's not "regulated" per se.
Pros of centralized markets:
1) You can say that the fact, that it is regulated, because it makes it rational and organised.
2) People usually can trust it.
Cons:
1) Monopoly.
2) It develops quite slowly.
That's the things i got from the top of my head.
"Variety is the spice of life".
Both the centralized and decentralized systems have their advantages and disadvantages.
Decentralized offers freedom and flexibity to its users and the community. Unlike the centralized which is regulated and strictly controlled. This removes the anonymity and reduces spam, and it would also mean taxes imposed on the community.
Both the centralized and decentralized systems have their advantages and disadvantages.
Decentralized offers freedom and flexibity to its users and the community. Unlike the centralized which is regulated and strictly controlled. This removes the anonymity and reduces spam, and it would also mean taxes imposed on the community.
We need both of them but to me I think decentralized market is better because it gives more freedom to people to engaged with themselves without no central authority
Centralized system meant to lock us by using our own money with the name of tax or anything.
Sometime this centralised medium may be best for the user's point of you.
Decentralised is the solution for the intervention of these shit things happening in the market.
Bitcoin and all the altcoins are the things which can be helpful to keep your fund without taxation.
We need both of them but to me I think decentralized market is better because it gives more freedom to people to engaged with themselves without no central authority
I been thinking this since yesterday. I made some research too about the topic. Found some article, say that Centralized market is good to the community as it gives more profit But some article say that Decentralized market is better as it gives equallity to the market.
I Got sone confusion here.
In your opinion which is better to invest?
I Got sone confusion here.
In your opinion which is better to invest?
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