Bitcoin Forum

Today, cryptocurrency exchanges are gaining a lot of legitimacy as daily trading volumes now run in the billions of dollars. Even though there exist many popular trading platforms, the demand for new avenues is ever increasing.

With so many companies offering white label cryptocurrency exchange software solutions, it has become very easy to float your own trading platform. There are three types of cryptocurrency exchanges and it becomes important to understand the highlights of each before launching one. The three types of exchanges are listed below:


Centralized Exchange: This type of exchange focuses on high transaction speeds, easy liquidation of funds and supports multiple cryptocurrencies.

Decentralized Exchange: This variety of exchanges stay true to Nakamoto’s ideology for cryptocurrencies. Hence, decentralized exchanges focus on protecting the anonymity of users and improving the security of the platform.

Hybrid Exchange: As the name suggests, this type of platform borrows the strengths of centralized and decentralized exchanges. Therefore, users can access high transaction speeds without compromising on their anonymity.

Go-to name for building your white label cryptocurrency exchange. (https://blockchainappfactory.com/cryptocurrency-exchange-software)

It seems to me that there is no difference between this types of exchanges, if these exchanges are reliable and are in the top 10-15.

The difference is wether or not you are holding your private keys.If you don't have your private keys,you are rellying on the mersy of a centralised exchange to decide what to do with your own coins,that you have deposited there.It doesn't matter if the exchange is "reliable" or not.I've seen many horror stories of people that were scammed by big and "reliable" crypto exchange platforms.

I haven't heard even about 1 hybrid exchange that actually work, enables high transaction speed, don't store my coins on their wallet and has high real volume (which is essentional to have low spread). I also daubt it's possible.

So, where do exchanges that have provisions for atomic swaps like Kyber Network and bancor network fall under? Please note that sometimes this exchanges may require KYC if you are dealing with Large amounts of money.

And Localbitcoins? Which category does it fall under? It's a peer to peer exchange you do not own private keys.

The OP is just promoting his services, nice try though. You should have at least shill for your services and give the community the advantages instead of masking your real intentions from the beginning but in the end you clearly just wanted to promote your "app-factory".

The only difference is your lack of understanding of the rules. When you use random platforms, your potential loss of funds is likely, and the possibility of not recovering the money is certain.
Centralize and famous platforms are less likely to be scammed but everything is possible.
Not your Keys, Not your coins.
Do not keep your coins on platforms unless you need to trade.

A lot of people still keep their coins on exchanges despite all the advises which makes it easy for any exchange to really have full control over their money, the only coin I usually leave on most of these exchanges without withdrawing them to my wallet are shitcoins that cost percentage the exchange requires and fee is far more than half of the total investment, I remember one of these exchanges where I have about 1000 of the coin in question, tried withdrawing and the exchange charged me like almost 400 of the coin as fee, I had to just leave it there till I run into lock for the coin to grow.

well, there is some difference actually. still, enough trading volumes, user-friendly interface and convenient deposit/withdraw procedures are the key factors to choose an exchange

So what was Nakamoto's crypto ideology? There is nothing said about the anonymous transaction in bitcoin manifesto.
You should also mention that decentralized are normally used to buy or sell your crypto while centralized ones pretty often provide access to margin trading.

Very, very wrong to save coins if not used to trade because one day the coins will disappear instantly and they will not be fully responsible for what you feel lost, save your coins in the wallet if for long-term investments, send them to the platform if someday I want to trade, that's what I do and must fully understand what needs to be done and anticipate what should be done too, don't easily trust all platforms because all systems are not fully secure.

Decentralized exchange will give solution for issue of security on crypto centralized exchanges.  Decentralized exchange  should be offer more interesting feature to attrack new user.  Make deposit on crypto decentralized exchange is mean we have full control with the money. 

Have never heard about the hybrid exchange though, but yes,decentralized exchanges does not store user's funds exchange which allows peer to peer cryptocurrency trading. The centralized description is also right.

I still cannot understand it though.

The coins will not disappear unless you sold it. Yes, they are not responsible for your loss but you are the one who decides whenever you want to trade. Its a waste of money if you send back and forth your coin towards a platform and your secured wallet.

I thought you were going to talk about how the different exchanges is offering different types of opportunities to people. For example with Binance, you do Spot Trading, not yet into margin trading but I think they are getting into it. As for Bitmex and Deribit, they are focused on margin trading and futures/perpetuals. I hope you could add that to your comparison and add more information about it.

No. Mr.Satoshi's ideology must be NOT depending on any services but with your friends and colleagues. It means decentralized way of exchange will not fulfill what Satoshi was dreaming but exchanging within ourselves in P2P way must be a true way of following as per Satoshi's ideology.

Moreover, even in decentralized environment at the time of "actual exchange" we need to move up all of funds to the centralized authority and need to depend on them to complete the transaction. Even here, exchange operation is happening very similar to escrow, I am not ready to accept is works in complete decentralized manner. Probably all decentralized exchanges are the true hybrid exchange as it ensures only half of decentralization.

This is the reason his explanation on various types of exchange are not enlightening us into anything new. I believe this is not a right way of having discussion here and probably it is an example of misusing "freedom of speech" which is a big moto of this forum.

Again, the decentralized exchanges focuses more on peer-to-peer trade, while centralized exchange focus more on transact speed and etc. Well, you can understand it more though if you have try to do it like what I am doing now from this upcoming exchange (http://mkt.bitrus.com/signup/?utm_source=crowdcreate&utm_medium=agency&utm_campaign=btrs_ico&utm_content=kickoff) .

Hybrid exchange still on the progress and I think it's the ICO and there is so many of the project that calling their project as Hybrid Exchange.

But if the hybrid exchange means that we can buy and sell in one platform and we could swap one coin to another coin, I guess we already have a few wallets that can do it. You can try with Coinomi and Jaxx, and they are supporting to swap the coins. But I don't know if it's the same or not ;D

Can someone please give me examples of centralized and decentralized exchange platforms? Did I get it right, that centralized platforms have your private key?? I think I never used a centralized platform. As far as I know, no one has my private key...I hope.  :D

Centralised = Binance, Bittrex, Poloniex, etc.
Decentralised = Forkdelta, IDEX, Binance DEX (not yet live), WavesDEX, etc.

For your second question, yes. Centralised 'hold' your private key. In fact you never have an actual wallet as your deposit address is owned by them.

Like a newbie, I am also having few concerns/doubts on decentralized of exchanges.

1. I do see decentralized exchanges are getting popular after ethereum based smart contract / tokens. Does it mean a decentralized exchange will not be possible for bitcoin or other actual coins (not for the category of token nor smart contract based). Is these any exchange available for trading bitcoin into litecoin, in those prescribed decentralized way ?

2. I have traded etherdelta, forkdelta and idex exchanges. I needed to have a new eth wallet for exchange purposes hence I need to move my tokens multiple times whereas I remember for a centralized exchanges moving only once is more than enough.

3. I need to share my private-key with exchange, still how we do call they are they are all decentralized ? I mean I need to compromise my security whereas with decentralized exchange I need to trust them completely. No big differences.

Ideally, I would choose a decentralized exchange with a user-friendly interface and many different features that centralized exchanges have. Unfortunately I have not found such an exchange yet. Can someone share a link to such an exchange?

I don’t know any hybrid exchange that is currently operating. If someone knows any, I would be grateful for naming them. So, considering building a cryptocurrency exchange, focus on a hybrid one. There are many centralized exchanges, which gained a reputation in the course of time, as they were the pioneers in the crypto market. I think it’s unlikely a newly launched centralized platform would be able to compete with such established giants as Coinbase, Binance, Bitstamp or CEX (https://cex.io/bch-usd). I believe the mentioned exchanges are the examples of good platforms everyone who is wishing to build the own centralized exchange should focus on. The decentralized exchanges fell short to deliver easy-to-use platform though they are highly secure, unlike centralized exchanges. The users don’t want to bother with the complex site, they need simplicity. This obstacle reduced the demand for decentralized exchanges. Therefore, in the vast majority, they have low trading volumes that additionally make them less attractive for trading. Thus, the niche for hybrid exchanges is open. IMO it would be easier to reach the audience, as you would be the pioneer.