Topic: Why are centralized exchanges still dominating the crypto space? (Read 13127 times)

That's certainly true, mate. I believe that the lack of regulatory compliance is what has limited DEXs from obtaining a large share of dominance within the market. While they're still beneficial for those looking for an additional layer of privacy and security, centralized exchanges are still better in many ways. Ever since Bitcoin came into inception, centralized exchanges have been dominating the crypto space because of obvious reasons.

Still though, they present potential risks of hacks and fraud due to their single points of failure. As far as DEXs go, they could cease to exist anytime soon if their underlying blockchain network dies. But, knowing that Blockchain lives if there's at least 2 nodes on the network, it's highly unlikely that DEXs will die anytime soon.

Nonetheless, if you're looking for an easy way to exchange crypto to fiat, then centralized exchanges are the best ones suited for this purpose. On the other hand, crypto-to-crypto trades can be performed much safer and reliable in decentralized exchanges than in centralized ones. Just my thoughts

As much as I understand, Bitcoin is the only decentralized system created that is trust worthy and reliable, others are just full of failed programs, any one would prefer a centralized exchange to a decentralized one, at least with centralized exchanges, I have someone to look up to when I have issues as regards my transaction.

I think people prefer a system where they can still be able to hold someone responsible for their dealings, in DEX exchange, if one have any issue or made a mistake, who do you talk to? A computer program that has already been coded and cannot interact with human interface directly. I understand we are now in the age of artificial intelligence, but until it becomes perfect, it is too risk depending completely in computer operation alone.

The system we are in is already used to centralized exchanges.
There are lots of benefits that centralized exchanges now enjoy, part of which is volume.
The belief of crypto enthusiasts in CEX has increased its volume, which means it will have more traders than DEXes. Therefore liquidity will be met.

I guess that it’s a matter of our mindset. People still don’t recognize value of crypto because for centuries our brain has been learning quite opposite example of what value is.

Not really, there are quite many centralized exchanges has been hacked and of course it has leaving bad reputation to traders.
I think centralized exchanges still dominating because there are more centralized exchanges than decentralized exchanges in cryptocurrency.
We need to create more good decentralized exchanges to balance the numbers of centralized exchanges.

I am agree, its about people's wallet security and not everyone can trust instantly. I am more comfort using centralized exchanger because have liquidity and trading transaction fee very low. DEX i ever used is CryptoBridge and i think its really good but sometimes need faster internet connection

One of the major reasons why people prefer using the centralised exchange is because they are uncomfortable with the decentralised exchange asking for private keys or other sensitive information to gain access to the exchange. People are scared of loosing their digital assets to hackers. Centralised exchange only requires your wallet address to transfer the funds and some decentralized exchange fees are economical and affordable.

In fact, the use of crypto money is more for trade or investment, so it requires crypto exchange which is a full 24-hour non-stop activity and is located throughout the world.
Existing inter-individual transactions or merchant payments do occur and are increasingly happening, but all will make withdrawals from crypto money into banknotes through government-licensed exchanges so that everything is safe.

Centeralized exchanges have first mover advantage and many people don't care enough to secure their private keys added to that dexes have some steep learning curve involved, so cexes are thriving.

This happens a lot and is inversely proportional to the market. maybe because the user also needs a third party to facilitate the transaction so that it can help in selling crypto. but here the capacity is as a third party that provides services based on the initial agreement.

The reason is simply, the cryptocurrency community haven't grown to the stage of accepting the fact, the blockchain (Bitcoin) technology was developed to strengthen privacy thereby enforcing transparency which will result to eliminating third parties but since trust is still an issue in the community, her investors instead to rely on this same third parties the technology was trying to avoid to solve the trust issue. You should also know the so called decentralized exchanges aren't helping matters as most of them aren't decentralized as they claim and still very vulnerable and unreliable.

dex's are not generally licensed or insured, if they get hacked or loose coins your SOL
they also DEPEND highly on their mother chains, if BTS went down guess what? no more cryptobridge

ya im good thx haha ill stick with bigger ones, polo for example. self sustained, well established (and didnt have a cash grab ICO to do it)

Exactly. Even decentralized exchanges are now requiring KYC, which greatly defeats their purpose altogether. A good example of this, is CryptoBridge which now requires customers from the US to verify their ID. Considering how decentralized exchanges have started to go down this path, I believe that the only way to trade crypto without middleman would be via the use of Atomic Swaps. This will be a game changer, as it will allow people to swap from one crypto to another in a P2P manner.

Satoshi envisioned a fully decentralized world, where people would take control of their daily lives. But, his/her dream didn't come into a reality since after a decade of Bitcoin's inception, we're still depending on centralized entities. Of course, centralized exchanges may be faster and much easier to use than decentralized exchanges, but they bring huge risks such as government censorship or manipulation by third parties.

Nonetheless, I believe that centralized exchanges will continue to dominate the crypto space for a long time. Unless people stop trusting them altogether (as a result of hacks, scams or theft), they will be the norm of crypto trading. On the other hand, decentralized exchanges will only become an alternative for those looking for true privacy and security over their crypto funds. Just my opinion

most decentralized platforms suffer from a lack of liquidity which makes the exchange of coins very difficult and inefficient. Even in the crypto world, many are unaware of decentralized exchanges. This is a ‘chicken-and-egg’ problem because once more users will trade on the platforms, they will also bring liquidity. The most challenging part will be the development of fiat currency liquidity pools.

They are very easy to use, and come with little to no complications unlike most decentralised exchanges out there. More to it, most decentralised exchanges these days are not really decentralised, some now even require KYC and whatnot. Best is to stick with what's clear

Well, centralized exchanges are not high in security but rather fully compliant with regulations. Not to mention, they're the ones with the most liquidity on the market. Serious investors and traders rely on centralized exchanges because of said reasons. However, none can match the security and censorship-resistance available within decentralized exchanges.

Of course, both centralized and decentralized exchanges have their respective advantages/disadvantages. Depending on our needs, we would need to use either one of them or both. Given how long centralized exchanges have been on the space, it's nearly impossible for them to cease to exist anytime soon.

Nonetheless, time will tell us whenever centralized exchanges will continue to dominate the crypto space as their security is put up to the test. If more attacks and scams occur within centralized exchanges, then people will switch to decentralized alternatives for all their crypto trades. Just my opinion

Because they are easier to use and more convenient. But you are always going to need a middle man to be certain that both parties receive their coins and you need to collect the trading fees. DEX exchanges still need to receive the coins to their wallets before sending the other coin to your wallet. It is not like just sending something without receiving something.
A real DEX exchange is slower, as you need to make a real transaction on the blockchain to send your coins and wait for another transaction to receive the other coins. Real DEX exchanges can't compete with the speed of a centralized exchange.

Everything is very simple, probably only the fact that today there is an opportunity to use only centralized exchanges and only centralized exchanges today have real opportunities for use, then probably today they are popular.

In cryptoworld people patronizing centralized exchange site because you have a control in your transaction every trade it has also a good UI and graphics compare to decentralized exchange site and not all have a good volume to trade most of the time decentralized are easy to hack.

Spot on. It's because people want fiat. If people were purely trading coins, and then spending coins, there wouldn't be any need for fiat at all, and hence no need for a centralised exchange.

But the crypto commerce space hasn't developed, so the only way to cash out and pay bills is using a centralised exchange.