Connect with us

Blogs

Future of Decentralized Cryptocurrency Exchanges

Published

on

cryptocurrency exchanges
READ LATER - DOWNLOAD THIS POST AS PDF

With the introduction of cryptocurrency exchanges and blockchain technology 10 years ago, we also got introduced to a concept of functioning decentralization. Naturally, such an idea has been around for a while, but we never managed to get so close to it as we did once the blockchain technology emerged.

As a result, it allowed us to eliminate the middleman, and cryptos did the same when it comes to making direct payments and transactions. However, when it comes to crypto trading, exchanges became a necessity, and they are the only aspect that is still highly centralized. As a result, decentralized exchanges emerged as a way of correcting this and resolving the issue.

Centralized exchanges are not acceptable for the future of crypto trading for several reasons. Hacking, fee manipulation, token listing charges, and similar things are too bank-like for most crypto users to feel comfortable.

At first, centralized exchanges were tolerated. They were still considered a new concept, and many believed that some level of centralization might serve as a good anchor for the crypto world. An increase in hacking attacks that followed quickly proved that this was not the best idea and that the time has come for exchanges to become decentralized as well. This is how DEXes came to be.

How are Decentralized exchanges better?

According to experts, decentralized exchanges are much more practical when it comes to trading larger volumes. They are much more secure, and so far, hackers have never been a problem for any DEX. Considering that there are no centralized servers that can be hacked, all the information is safe.

Next, a lot of centralized exchanges are criticized for charging large fees, especially when it comes to the token listing. This is simply not a problem for DEXes since they have no centralized authority that would have to pay for servers and alike. That way, assets can be listed without spending large amounts of money on the process itself, and projects that are being listed have a much better chance at growing and developing further.

Finally, there is the matter of increased fungibility. Simply put, fungibility is described as the ability to trace cryptos. Some cryptos, such as Bitcoin, can easily be traced and see who was a previous owner of the coins you now possess. This is especially important due to the fact that BTC was used for notorious and downright illegal activities. Legitimate, law-abiding users do not wish to be connected to such activities, which is why to always know where your coin came from, and what kind of history does it have.

Disadvantages of DEXes

One of the biggest disadvantages of DEXes is that they are not exactly as user-friendly as centralized cryptocurrency exchanges. Cryptos are still new and largely unknown, despite all the attention that they received in the last two years. In centralized exchanges, even new users can easily find their way around and enter trading, while DEXes are simply too complex for most beginners. It is easy to get confused and lost with all the activity, which can discourage people from entering the crypto space in general.

Another big issue is their transaction speed. Speeds are not great on DEXes, which can be frustrating and costly since all validation needs to be done on the blockchain. Centralized exchanges have a central authority that takes care of this, which is why transactions can occur quickly and without issue there.

The third big problem is that some DEXes can be a bit expensive. Some of them use gas, which means that block confirmations can be costly. Considering that reducing the costs is one of the biggest reasons why people decide to enter the crypto world in the first place, this might be a deal breaker for a lot of newcomers.

Finally, there are several DEXes which have been working on improving speed and reducing costs by using smart contracts for transaction validating. However, to make this work, they had to introduce some centralized features. This is confusing to a lot of investors, as they for true decentralization, but they also want a cheap, fast, and good service.

Considering that DEXes are still new, issues that are currently troubling them will certainly be resolved in the future. However, for now, they are still present, which is why decentralized exchanges have as many issues as they have benefits and advantages. Still, as this technology grows and develops, DEXes will likely become dominant, while centralized exchanges will have a hard time keeping up. The same will be true when it comes to banks, and experts believe that more and more users will seek true decentralization in every aspect of the financial industry.

For real-time trade alerts and a daily breakdown of the crypto markets, sign up for Elite membership!

Disclaimer: This article should not be taken as, and is not intended to provide, investment advice. Global Coin Report and/or its affiliates, employees, writers, and subcontractors are cryptocurrency investors and from time to time may or may not have holdings in some of the coins or tokens they cover. Please conduct your own thorough research before investing in any cryptocurrency and read our full disclaimer.

Image courtesy of Pexels

Altcoins

Cryptocurrency Collateralized Debt Positions Are Growing in Popularity

Published

on

collateralized debt position
READ LATER - DOWNLOAD THIS POST AS PDF

While Bitcoin (BTC) continues to hover around the magical 10,000 price level, altcoins continue to fight an uphill battle.  Simply put, hopes of a future bull run continue to diminish as Bitcoin maintains its dominance.  One school of thought is that a few altcoins will survive and flourish, but which ones are anyone’s guess.  That being said, it’s hard to go wrong picking against the top coins like Ethereum (ETH), Ripple (XRP), Litecoin (LTC), and EOS.  These projects have managed to find a foothold in the market and have a better chance than most of staying there.  While traders wait for their positions to increase in value, one opportunity that may be worth looking at is initiating a collateralized debt position.

What is a Cryptocurrency CDP?

In traditional terms, a CDP is essentially putting up collateral in order to receive a loan against the deposited amount.  There are several examples of this in our day to day lives.  Auto title loans from large companies like TitleMax are extremely popular with consumers.  Consumers are essentially able to use their car as collateral in exchange for a cash payment which can then be used for whatever needs the consumer has.  The consumer can continue using their car as long as debt payments are made.

The same concept applies to cryptocurrency CDPs.  Consumers are able to put up crypto tokens, such as…

Continue Reading

Altcoins

Hodium Presents a Compelling Opportunity for Outsized Investment Returns

Published

on

Hodium
READ LATER - DOWNLOAD THIS POST AS PDF

I’m sure all of us remember the cryptocurrency glory days of 2017 and early 2018.  It was one of the biggest bull runs in history and created incredibly wealth for quite a few early entrants.  Unfortunately, for most of us, those gains have most likely been wiped out during the altcoin apocalypse.  The truth is that traders probably thought a bit too highly of their trading abilities when the reality was that anyone could have thrown a dart at a board and ended up making money.

As markets mature (and the crypto market is definitely maturing) it becomes more and more difficult to generate alpha.  In that regard, it’s similar to traditional financial markets.  I can remember trading during my high school days.  It was the late 90s and right in the middle of the dot.com boom.  Eventually, however, the euphoria fades away and reality hits hard.  Now, it’s become rather difficult to actually trade profitably which has given way to the rise of hedge funds.

Hedge funds are investment funds that pool capital from accredited and/or institutional investors and invest in a variety of assets, often with extremely complex portfolio-construction and risk management techniques.  The professionals employed by hedge funds are the best of the best and have spent years honing their craft.  That is why they’re able to make the millions of dollars that they normally…

Continue Reading

Altcoins

KaratGold Proves Its Business Model By Providing Official Documents

Published

on

READ LATER - DOWNLOAD THIS POST AS PDF

There has been a lot of renewed enthusiasm in the cryptocurrency market thanks mainly to Bitcoin’s strong move about 10,000.  Although Bitcoin continues to show its dominance, the altcoin market has yet to benefit from that rally.  A few of the largest altcoins remain popular but the rest of the market continues to lag behind.  In 2018, there was a lot of talk regarding a possible altcoin apocalypse where only the strong would survive.  That prediction appears to be playing out as expected.  Going forward, only the best projects that have a real world need will survive.  Crypto traders will have to spend a lot of their time doing proper research in order to find the best opportunities, just like in all financial markets.  One promising project that appears to have the makings of a future winner is KaratGold Coin.

KaratGold Background

KaratGold Coin is a cryptocurrency developed by the reputable German company Karatbars International, which maintains a leading position in the market of small gold items and investments. The project is part of a larger ecosystem, which involves several blockchain solutions that can be used for transactions, communication, investing and other tasks. During the past few weeks, however, the KaratGold ecosystem has been a target of unsavory scam allegations.  

Karatbars International and GSB Gold Standard Banking Corporation…

Continue Reading

Elite