Topic: Decentralized vs centralized cryptocurrency exchanges, which one is better? - page 10. (Read 1101 times)
February 06, 2019, 10:58:33 AM
I hope there will appear many DEXes in next few years with good volumes, performance and usability. Solutions that we have today are not that popular mostly due to their interfaces and slowness. But instead they have a lot of very important features such as security and many others.
February 06, 2019, 10:23:48 AM
Decentralization regards as one of the main advantages of the crypto world. Decentralization is the process of distribution of powers in decision-making without the participation of a centralized body. The lack of control makes the cryptocurrency attractive within many market players. Nevertheless, decentralization has its weaknesses and many institutions tend to develop rules and regulations to have control under important processes. These points are actual among cryptocurrency exchanges as well.
Most of the transactions at cryptocurrency exchanges proceed at centralized trading platforms. The centralized cryptocurrency exchanges are regulated by the definite company or person. The companies control all operation proceeded at cryptocurrency exchanges. The centralized cryptocurrency exchanges are the third party which connects sellers and buyers. The main profit of the centralized exchanges is getting by the commission of the transactions made by the users.
The centralized cryptocurrency exchanges store personal information about the users. This fact makes them very attractive to the hacker attacks. Also, most governments develop the regulations of cryptocurrency exchanges which require users to pass the verification process according to AML/KYC procedure. Such rules go against anonymity as the main principle of cryptocurrency. That’s why many users regard the verification as an inconvenient way of cryptocurrency trading.
As centralized cryptocurrency exchanges are controlled by the definite company the traders should accept the user agreement before the registration. Such agreements can create not very cleared conditions to their users. Some cryptocurrency exchanges, for example, have the right to block the user’s account without any warning if it is suspected of laundering money, receiving money from illegal activities and so on.
Centralized cryptocurrency exchanges provide good opportunities for the beginners. They provide users with a range of additional functions such as analytical materials, margin trading, stop loss, lending, etc. That’s why centralized cryptocurrency exchanges create attractive conditions for those who start trading.
Decentralized cryptocurrency exchanges work on the basis of smart contracts and can operate autonomously. That’s why the trading operations are conducted independently. There is no any intermediary, so the sellers and the buyers trade directly with each other. The decentralized cryptocurrency exchanges enable to store and to manage funds by users themselves. This fact makes decentralized cryptocurrency exchanges more reliable as they are less attractive for hackers attacks and quicker compared with the centralized exchanges, where the verification process can take a long period of time.
The technical support of decentralized cryptocurrency exchanges is more complicated. That’s why such exchanges need the high-experienced developers who can launch appropriate dApps. Also, the functionality of decentralized cryptocurrency exchanges is still limited and not so user-friendly.
Decentralized cryptocurrency exchanges enable to exchange one cryptocurrency to another anonymously. But if the user wants to exchange the fiat money then he should pass the verification at most of the decentralized exchanges. One more advantage of such platforms is that the users' accounts can’t be blocked by anybody. If the exchange is unexpectedly closed or its team is arrested, users will be able to withdraw funds, as they are stored in the blockchain.
Decentralized cryptocurrency exchanges give the opportunity to trade ICO tokens easier and faster. Centralized platforms require a higher degree of technical development before they can safely integrate a new token into their sites.
Decentralized exchanges have become popular recently, nevertheless, they have some significant disadvantages. One of them is the possibility of trading only tokens belonging to the platform. For example, decentralized exchanges based on Ethereum can only offer Ethereum network tokens. Also, there is a low trading volume at decentralized platforms because of limited functionality.
So what kind of cryptocurrency is better? The choice of each user depends on its demands and necessities. The centralized for sure is good platforms for newbies as they provide a trader with a range of user-friendly functionality. The experienced users can combine the trading at two types of platforms depending on the kind of operation. To our mind, the decentralized cryptocurrency exchanges maintain the main features of cryptocurrency and blockchain. That’s why they are more reliable, transparent and anonymous. Nevertheless, the world tends to regulate cryptocurrency operations so that the decentralized cryptocurrency exchange may have various barriers in their development in future.
Thanks a lot for all your comments. So there are different points of view.
The decentralized cryptocurrency exchanges regard as the new era of the exchanges. They are not controlled by a definite company and the users' funds are stored at their personal wallets. That’s why decentralized cryptocurrency exchanges provide the confidence and protection to the traders. There are a number of disadvantages in the functionality of decentralized exchanges compared with the centralized one.
Other opinions stated that the future belongs to the hybrid cryptocurrency exchanges. A key feature of hybrid exchanges is the parallel operation of centralized and decentralized systems.
But there are still many barriers to the development of hybrid exchanges.
So, the best way of protection is decentralization. That's why decentralized cryptocurrency exchanges are more secure. The lack of functionality of decentralized exchanges and the low level of protection of centralized exchanges have created the concept of hybrid cryptocurrency exchanges that can be a very perspective compromise in the future.
Most of the transactions at cryptocurrency exchanges proceed at centralized trading platforms. The centralized cryptocurrency exchanges are regulated by the definite company or person. The companies control all operation proceeded at cryptocurrency exchanges. The centralized cryptocurrency exchanges are the third party which connects sellers and buyers. The main profit of the centralized exchanges is getting by the commission of the transactions made by the users.
The centralized cryptocurrency exchanges store personal information about the users. This fact makes them very attractive to the hacker attacks. Also, most governments develop the regulations of cryptocurrency exchanges which require users to pass the verification process according to AML/KYC procedure. Such rules go against anonymity as the main principle of cryptocurrency. That’s why many users regard the verification as an inconvenient way of cryptocurrency trading.
As centralized cryptocurrency exchanges are controlled by the definite company the traders should accept the user agreement before the registration. Such agreements can create not very cleared conditions to their users. Some cryptocurrency exchanges, for example, have the right to block the user’s account without any warning if it is suspected of laundering money, receiving money from illegal activities and so on.
Centralized cryptocurrency exchanges provide good opportunities for the beginners. They provide users with a range of additional functions such as analytical materials, margin trading, stop loss, lending, etc. That’s why centralized cryptocurrency exchanges create attractive conditions for those who start trading.
Decentralized cryptocurrency exchanges work on the basis of smart contracts and can operate autonomously. That’s why the trading operations are conducted independently. There is no any intermediary, so the sellers and the buyers trade directly with each other. The decentralized cryptocurrency exchanges enable to store and to manage funds by users themselves. This fact makes decentralized cryptocurrency exchanges more reliable as they are less attractive for hackers attacks and quicker compared with the centralized exchanges, where the verification process can take a long period of time.
The technical support of decentralized cryptocurrency exchanges is more complicated. That’s why such exchanges need the high-experienced developers who can launch appropriate dApps. Also, the functionality of decentralized cryptocurrency exchanges is still limited and not so user-friendly.
Decentralized cryptocurrency exchanges enable to exchange one cryptocurrency to another anonymously. But if the user wants to exchange the fiat money then he should pass the verification at most of the decentralized exchanges. One more advantage of such platforms is that the users' accounts can’t be blocked by anybody. If the exchange is unexpectedly closed or its team is arrested, users will be able to withdraw funds, as they are stored in the blockchain.
Decentralized cryptocurrency exchanges give the opportunity to trade ICO tokens easier and faster. Centralized platforms require a higher degree of technical development before they can safely integrate a new token into their sites.
Decentralized exchanges have become popular recently, nevertheless, they have some significant disadvantages. One of them is the possibility of trading only tokens belonging to the platform. For example, decentralized exchanges based on Ethereum can only offer Ethereum network tokens. Also, there is a low trading volume at decentralized platforms because of limited functionality.
So what kind of cryptocurrency is better? The choice of each user depends on its demands and necessities. The centralized for sure is good platforms for newbies as they provide a trader with a range of user-friendly functionality. The experienced users can combine the trading at two types of platforms depending on the kind of operation. To our mind, the decentralized cryptocurrency exchanges maintain the main features of cryptocurrency and blockchain. That’s why they are more reliable, transparent and anonymous. Nevertheless, the world tends to regulate cryptocurrency operations so that the decentralized cryptocurrency exchange may have various barriers in their development in future.
Thanks a lot for all your comments. So there are different points of view.
The decentralized cryptocurrency exchanges regard as the new era of the exchanges. They are not controlled by a definite company and the users' funds are stored at their personal wallets. That’s why decentralized cryptocurrency exchanges provide the confidence and protection to the traders. There are a number of disadvantages in the functionality of decentralized exchanges compared with the centralized one.
I hope there will appear many DEXes in next few years with good volumes, performance and usability. Solutions that we have today are not that popular mostly due to their interfaces and slowness. But instead they have a lot of very important features such as security and many others.
of course decentralized was better, in term's of security DEXs have more point than centralized exchange.
when we use centralized exchange we entrust our money to them so if there are server down or exchange getting hacked you can imagine that all of our money in their exchange will also gone.
it's different compared to DEXs because orders and information routed in a peer-to-peer protocol.
but sadly mostly DEXs now still have to improve in their UI, because it's still confuse many people that new to DEXs.
when we use centralized exchange we entrust our money to them so if there are server down or exchange getting hacked you can imagine that all of our money in their exchange will also gone.
it's different compared to DEXs because orders and information routed in a peer-to-peer protocol.
but sadly mostly DEXs now still have to improve in their UI, because it's still confuse many people that new to DEXs.
Other opinions stated that the future belongs to the hybrid cryptocurrency exchanges. A key feature of hybrid exchanges is the parallel operation of centralized and decentralized systems.
Now there are hybrid exchanges. I think the future belongs to them. For example, at the development stage, the qurrex project.
But there are still many barriers to the development of hybrid exchanges.
Hybrid exchange are still new and we have few of them. The bearish market period does not give opportunity to determine the success rate of the hybrid exchange, none on the list high volume exchanges. Asides the security role and platform for large number of coins, the exchange will still have to compete for high volume trade and fiat exchange.
So, the best way of protection is decentralization. That's why decentralized cryptocurrency exchanges are more secure. The lack of functionality of decentralized exchanges and the low level of protection of centralized exchanges have created the concept of hybrid cryptocurrency exchanges that can be a very perspective compromise in the future.
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