The ecosystem of 2Ether will include a decentralized exchange, 2EtherEx. How are decentralized exchanges – DEX – different from traditional centralized exchanges? Are they really better? What issues do they face? We'll tell you all about it a series of posts. This time, we'll look at centralized exchanges – why they have nothing to do with real decentralization and what risks they pose.submitted by 2Ether to u/2Ether [link] [comments]
Big exchanges like Coinbase and Huobi allow you to trade in decentralized crypto assets, but they themselves are completely centralized. This is for three reasons:
1) All transactions are processed off-chain and recorded in the exchange's own database. All those thousands of trades made every day on Coinbase, for example, are never recorded on the blockchain.
2) Client funds are stored in a centralized way. When you deposit money on an exchange, it goes into the main wallet of the exchange. It's huge – there are millions of dollars' worth of crypto there. If you send money from your blockchain wallet, then this – and only this – operation is recorded on the blockchain. After this, the centralized exchange assigns you credit of sorts – it puts as much crypto on your individual account as you put in the main wallet. At the end of trading, when you want to withdraw your profits, you sort of exchange those credits for the real crypto, which gets sent to your wallet. This transaction is also recorded on the blockchain. But everything in between has nothing to do with decentralization.
3) The exchange management is centralized – it's in the hands of a few people. They can become very powerful, and their decisions influence what happens to your funds. For example, Changpeng Zhao, the CEO of Binance, has such weight in the industry that he doesn't even comment on the potential of any coins. On the other hand, illegal actions taken by exchange executives can have terrible consequences. When the CEO of the Canadian exchange Quadriga was found dead in India, it turned out that almost $100 million were missing from the accounts. This money will probably never be found.
Centralization of exchanges has several more risks:
- Easy target for hackers. We've all heard about massive thefts from exchanges – sometimes up to $500 million. Since all the funds are stored together, exchanges' wallets are among the most attractive things to hack, so criminals keep trying.
- Arbitrary actions. An exchange can suddenly close operations in a certain country, introduce an obligatory KYC, or delist an asset.
So if centralized exchanges are so risky, why do most traders use them? The reason is that they have some very serious advantages, too. We'll look at those advantages in our next post.
Web site — https://2ether.com/ Twitter — https://twitter.com/2Ether_ Discord — https://discord.gg/TuqG4py Facebook — https://www.facebook.com/2Ethe Reddit — https://www.reddit.com/use2Ether Medium — https://medium.com/@2ether Teletype — https://teletype.in/@2ether Telegram — https://t.me/ether2support Telegram chat — https://t.me/blockchain_2ether
|Rate (per day)||2.10||12.57|
Generated with BBoe's Subreddit Stats (Donate)
“Bitcoin customers are good customers, and we’re pleased to provide them this service”. CEO of exchange First Meta found dead in Singapore. Autumn Radtke, the US-born CEO of First Meta, was found dead following an apparent suicide in her Singapore home. The director of the digital currencies exchange was 28 years old and in charge of the ... By CCN: The CEO of Binance cryptocurrency exchange, Changpeng Zhao, has predicted that India’s proposed anti-crypto bill will spur the adoption of privacy coins such as Monero and ZCash in the ... Binance is looking to consolidate more bitcoin mining hashrate to its pool in Russia and the Central Asia region. The world’s largest crypto exchange is deploying a physical server node for its pool at BitRiver, the largest bitcoin mining hosting provider in Bratsk, Russia. The move would give miner owners at BitRiver who choose to switch to ... Bitcoin news — get the latest BTC news now. Breaking news from the best Bitcoin site, 24/7. Binance CEO Changpeng Zhao made a statement worrying low-volume altcoin investors. Changpeng Zhao said it would be a “good idea” to remove altcoin units tha Autumn Radtke, the US-born CEO of First Meta, was found dead following an apparent suicide in her Singapore home. The director of the digital currencies exchange was 28 years old and in charge of the company since 2012. “The First Meta team is shocked and saddened by the tragic loss of our friend and CEORead More
[index]          
Binance US Explores List of Altcoins for Latest Launch Narrated by The #Cryptocurrency Portal Sunday Aug 11th, 2019 ***Support the channel*** Check out our partner page at: https://thelocalforum ... #Bitcoin #Binance #UPS #Invest #Neblio #Starbucks #BAKKT #Cardano #Crypto #Invest #Bitcoin #XRP #StellarLumens #Google #Vechain #Ripple #ethereum #Bakkt #Crypto #cryptocurrency #news #btc #Invest ... #bitcoin #like #cryptocurrency #news #btc #ethereum #eth #cryptocurrency #litecoin #altcoin #altcoins #eos #forex #money #best #trading #bitcoinmining #invest #trader #cryptocurrencies #top # ... Close. This video is unavailable. Catherine Coley from Binance.US talks crypto, Binance.US entry into the U.S. market and future products offerings. Meanwhile, Changpeng Zhao, CEO of another major crypto exchange, Binance, congratulated Coinbase as it's "pushing/paving the way for other crypto businesses."The CEO said that Binance is not ... VeChain's CEO just went live to discuss the stolen VET. Bitcoin's next move will set the tone for 2020! QuadrigaCX Exchange CEO's body to be exhumed. THIS critical support level MUST HOLD for Bitcoin.