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
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 It said the firm moved $370800 in Bitcoin to a cold wallet controlled by CEO Gerald Cotten, Is bitcoin dead reddit, 6:17 PM ET Thu, Following the SEC's review of its initial rejection of the Big Bitcoin Exchange Welcomes High Speed Traders Winklevoss's proposal for a bitcoin, eTF, the agency has Jan 20, 2019 - Roger Ver accused of running a scam by the Reddit Bitcoin Monero [XMR]'s lead ... The Japan-based exchange's chief executive Changpeng Zhao, known as CZ, said the transaction represented 'about 2%' of Binance's total Bitcoin holdings. #bitcoin #binance #tether #crypto #cryptocurrency #usdt #bnb #crypto #ethereum #eth #altcoin #altcoins #tron #trx #china . The information contained herein is for informational purposes only. Nothing herein shall be construed to be financial legal or tax advice. The content of this video is solely the opinions of the speaker who is not a licensed financial advisor or registered investment ... Bitcoin News. Home; News. News. Analysts: The $14K Bitcoin Price Wasn’t a Fluke. News. As Bitcoin Price Skyrockets, 97% of BTC Addresses Now in Profit… News. Quarterly Rebalance Notice For The BNC-BTSE Composite Index November 2020. News ... 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 ... While the sudden boom in trading is good news for Binance, it pails into comparison with the exchange's all-time daily trading high of $5.6 billion—when Bitcoin hit $14,000 in mid-June this year.
[index]          
50 Likes on this video activates my $25 BTC GIVEAWAY🎉🎉 Like, Sub & Comment below to enter💬 My Passive Trades EARN BTC DAILY MON-SUN👍🏽 MPT - Registration ... Urgent bitcoin update? Altcoins End/dead? Why altcoins dumping now? Altcoins opportunity? And many more things...? (Big note-This is my personal Opinion.... Must research before any investment Pro QuadrigaCX 26,500 ($190,00,000) Bitcoin Exit Scam. Gerald Cotten, CEO and founder of QuadrigaCX dead in India. Jesse Poweel of Kraken investigate and has information about Bitcoin wallets. Daily Update on Kin coin, Stellar Lumens and the general market stabilising again. Learn why the next 48 hours might be crucial for bitcoin and stellar price... Happy Halloween! Bitcoin just hit a major milestone. Right now this is news. At some point it will turn into history. Like. Comment. Subscribe. Follow us on Twitter: https://twitter.com ... IvanOnTech interviews https://BnkToTheFuture.com CEO, Simon Dixon. They talk how Simon spoke at the first bitcoin conference in 2011, how he founded BnkToTheFuture and became an early investor in C... New, updates, calculations, theories about Bitcoin and Alt Coins with open livestream discussions.