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Future of Decentralized Cryptocurrency Exchanges

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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.

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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.

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Altcoins

KaratGold Proves Its Business Model By Providing Official Documents

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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…

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Altcoins

ICTE May Bring About Sweeping Changes for Cryptocurrency Exchanges

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Cryptocurrency has taken the world by storm during the last few years. An entirely new financial market was created almost overnight which has captured the imagination of all its participants. Cryptocurrency is even starting to attract institutional money from investment banks, hedge funds, and other proprietary trading firms. Despite the rapid growth, traders remain extremely frustrated by having to deal with the fragmented nature of centralized crypto exchanges.

A Change is Needed

When cryptocurrency first began, there weren’t many participants and the trading volume was relatively insignificant. But, over time, that has radically changed. Some tokens now have a capitalization in the billions and are being traded 24-7 by institutions all over the world. Despite the volume, significant problems exist with the current way that exchanges work. Some of those problems include the following:

  • Constant fear of hackers
  • Exchange manipulation
  • Fragmented liquidity
  • Risk of identity theft

One of the biggest issues regarding centralized exchanges is the risk of being hacked. These hack stories seem to always be circulating around the internet. While experienced traders may have the tools to avoid becoming a victim, potential new traders have zero interest in dealing with this. And it’s not just the small exchanges that are at risk. Even large exchanges, such as Mt. Gox and Binance, are subject to being hacked.

Another huge risk is having to deal with…

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Altcoins

SonicX and Dash Could Challenge Facebook’s Libra for Global Payments Market Share

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When Satoshi Nakamoto unveiled Bitcoin to the world, the dream was always for Bitcoin to serve as a new universal currency.  It would be free from the bureaucracy of governments.  And free from the tyranny of the old-world financial cartels.  Although the dream hasn’t yet materialized, it comes closer and closer with each passing day.

One of the biggest roadblocks for Bitcoin has been scalability.  At a speed of approximately 7 transactions per second, Bitcoin lags behind other cryptocurrencies like Ripple and global payment processors like Visa.  Many expect the lightning network to have a positive impact on Bitcoin’s TPS but until that comes to fruition, mass adoption will likely need another significant development.

Libra Currency Announcement

One development that could help pave the way toward mass adoption is the launch of the Libra currency.  Libra is expected to go live during the first half of 2020 according to Facebook’s June announcement.  According to Facebook, Libra will make sending money online cheaper and faster.  It will also have a hand in improving access to financial services, especially for the unbanked.  Given Facebook’s global reach, including many third world countries, providing financial access to the unbanked could provide a huge spark to global economies.  Additionally, it could provide the growth spark that cryptocurrency needs.

Facebook’s most popular messenger, WhatsApp, has approximately 1.5 billion monthly users.  This application is…

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