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)
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 ... 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 ... “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 ... 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 Bitcoin news — get the latest BTC news now. Breaking news from the best Bitcoin site, 24/7. 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 The CEO was found dead at his home. Technology entrepreneur Fahim Saleh was found dead in his New York apartment. The US media has announced that the head and limbs of Saleh, 33, have been shattered by a chainsaw. The CEO was found dead at his home.
[index]          
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. Bitcoin and cryptocurrency news - Oracle getting into blockchain, Bill Gates bashes BTC, TV spots for crypto, Cardano testnets, massive partnership for Vechain, and ICO madness. Oracle https ... Catherine Coley from Binance.US talks crypto, Binance.US entry into the U.S. market and future products offerings. This Line Is Critical For Bitcoin + Binance Scandal Altcoin Daily. Loading... Unsubscribe from Altcoin Daily? Cancel Unsubscribe. Working... Subscribe Subscribed Unsubscribe 161K. Loading ... 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 ... Binance CEO Changpeng Zhao (CZ) gives us his thoughts on where cryptocurrency markets, Bitcoin and Binance are headed in 2020. Plus he openly addresses Binance's role in the recent Steem voting con... Close. This video is unavailable. Like. Comment. Subscribe. Twitter: https://twitter.com/AltcoinDailyio Binance CEO Delists Bitcoin SV, Calvin Ayre Responds, Crypto Feud Ensues https://dailyh... Bitcoin and cryptocurrency news - Millenials love Bitcoin.....surprise! Uganda gets Binance, Bitcoin and the sex drugs nexus, no rock and roll, sorry! Crypto Giveaway 10,000 Adbank - 6 lucky ...